Presently majority of the world's energy demand is met by fossil fuels. These fuels are depleting at an alarming rate. Thus in future, our energy systems will need to be renewable and sustainable, efficient and cost-effective, convenient and safe. Among the various alternative fuels, hydrogen is a long-term renewable and least polluting fuel (produced from renewable energy sources). Its clean burning characteristics help to meet the stringent emission norms. Majority of the work using hydrogen as a fuel is being done in spark ignition engine, however, in this experimental investigation efforts have been made to utilize it in compression ignition engine. In this investigation, the performance and emission characteristics were studied on a direct injection, single cylinder, four-stroke, air-cooled, stationary diesel engine coupled to an electric dynamometer. Hydrogen-enriched air with carburetion technique was used as intake charge in the above mentioned engine with 10% & 20% exhaust gas recirculation (EGR). Performance parameters such as specific energy consumption, brake specific fuel consumption, brake thermal efficiency were determined and emissions such as oxides of nitrogen, unburned hydrocarbon, carbon monoxide, carbon dioxide, oxygen and exhaust gas temperature were measured. Dual fuel operation with hydrogen induction coupled with exhaust gas recirculation results in lowered emission level and improved performance level compared to the case of neat diesel operation. Copyright (C) 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.