With increasing concern over global warming and energy consumption, diesel engines have received considerable attention due to their high thermal efficiency. However, diesel engines still suffer from high NO, and PM emissions. Therefore, this study focuses on the use of diesel water emulsified (DE) fuel to reduce NO and PM emissions and evaluates its application to conventional diesel engines based on the fundamental characteristics of DE fuel. DE fuels were applied to actual diesel engines, and their combustion, emission, and fuel consumption characteristics were compared with those of diesel fuel. The injection time was the same in all experiments. The coefficient of variation (COV) of all DE fuels was stable at a value as low as 2.0%, and the combustion duration was shorter than that of diesel fuel. The NO, and PM generation rates of DE fuels were considerably lower than those of diesel fuel because of the beneficial effects of the microexplosion and evaporative latent heat.