For diesel engines, low temperature combustion (LTC) with a high level of EGR and late injection becomes attractive because of its potential of simultaneous reduction of nitrogen oxides (NOx) and particulate matter (PM) emissions. However, detailed thermodynamic evaluations including second law analysis of the LTC are few. The current work employed an engine cycle simulation incorporating the second law of thermodynamics to evaluate the energy and exergy distribution of various processes in a low temperature combustion diesel engine. After validation with experimental data at eight operating conditions including four different EGR levels and two different injection timings, the model was used to evaluate the effect of EGR level and injection timing on the first and second law parameters. As EGR was increased, intake temperature and equivalence ratio increased. Results showed that for the case at 0% EGR level with conventional injection timing, about 30% of the fuel exergy was destructed during combustion processes, and as EGR level increased to 45% (intake temperature and equivalence ratio also increased), the combustion destructed exergy decreased to 20% of the fuel exergy. This was largely due to the related combustion temperature increase. For both conventional (-6.5 degrees aTDC) and late (1.5 degrees aTDC) injection timings, the percentage of exergy transfer through flows increases as EGR increases, which is attributed to the retarded ignition by increasing EGR. Other parameters such as energy and exergy transfer due to heat transfer, blow-by, and unburned fuel also were determined as a function of EGR level and injection timing. (C) 2011 Elsevier Ltd. All rights reserved.