The present study aims to utilize waste engine exhaust heat to produce hydrogen and utilize the same in the single cylinder CI engine as a closed system. A thermoelectric generator was used to convert the waste exhaust heat to hydrogen gas through PEM type fuel cell. The generator was placed in the engine exhaust and connected to the fuel cell and the output of the fuel cell was connected to the inlet manifold through a flow meter and safety devices. All the tests were conducted in a single cylinder CI engine with diesel as the base fuel and the produced hydrogen as the inducted fuel. Experiments were conducted at different load conditions with a constant speed of 1500 rpm. It is observed that the heat wasted from the exhaust increases with increase in load which improves the thermoelectric generator conversion efficiency and in turn increases the hydrogen flow rate. At maximum load, 351 ml/min of hydrogen was produced and sent to the inlet manifold of the engine. The conversion efficiency of the generator varies from 13.8% at low load to 51% at full engine load. The experimental results showed that with hydrogen induction brake thermal efficiency (BTE) was improved. At full load, BTE with hydrogen induction improves by 10% in comparison to only diesel engine operation. With hydrogen induction HC, CO and smoke emissions at full load reduced by 13.46, 31.57, and 24.7%, respectively, as compared to diesel. The decrease in emissions is attributed to decrease in diesel consumption as hydrogen replaces the diesel. However, there is a slight penalty in NOx emissions and it increases by 20% with hydrogen induction due to increase in in-cylinder temperature. (C) 2019 Hydrogen Energy Publications LLC. Published by Elsevier Ltd. All rights reserved.