This article is concerned with the performance analysis of a urea-water selective catalytic reduction system for reducing exhaust emissions from a direct-injection, water-cooled diesel engine. The main aim of this study is for reduction of NOx. The engine is operated with an injection pressure of 250 bar, injection timing of 20 degrees bTDC with 30% of urea and 70% of water flow rate, and 3 ml/min. Performance, combustion, and emission characteristics of the engine using mahua (madhuca indica) bio diesel (methyl ester of mahua oil) and its blend in different volumetric proportions with diesel has been investigated. The thermo-physical properties of the various fuel blends have been measured and presented. The entire experiment has been conducted under steady state from no load to full load. From the test results, it is observed that there is a decreasing trend of emission characteristics of HC and NOx when selective catalytic reduction technique is used. It is found that, at full load condition, the B25 gives lowest emissions of HC and NOx of 5.88 and 1.18%, respectively, in terms of percentage reduction as compared with B0.