This paper presents an experimental result carried out to evaluate exhaust gas emissions and deposit characteristics of a small diesel engine when operated on preheated crude palm oil (CPO) and its emulsions with 1%, 2% and 3% water. The test was conducted for 100 h using each of the test fuels with a constant speed of 2700 rpm and 5.50 Nm load. The engine was disassembled after the test to scrape carbon deposits from piston and cylinder heads. Ordinary diesel fuel (OD) scrape was used for comparison purposes. It was observed that preheated CPO reduced exhaust emissions such as containing less CO, HC and PM as compared to OD and CPO emulsified fuels. This is mainly attributed to the fact that preheating of CPO reduces its viscosity to the level of OD that improves the fuel spray and atomization characteristics and produces complete combustion. However, preheated CPO increased NO, emission as compared to OD and CPO emulsified fuels. This is mainly attributed from the deposit characteristic result, and shows that preheated CPO increased the highest fraction of ash deposit as compared to OD and CPO emulsified fuels, which is the reason for increasing NO, emissions. This programme will give useful information for further research and development in selecting the materials for engine parts and compatible lubricants if preheated CPO is used as an alternative to OD. (C) 2004 Elsevier Ltd. All rights reserved.