The aim of this study was to investigate the effects of varying the global equivalence ratio and intake oxygen flow-rate on the combustion and exhaust emission characteristics of dimethyl ether (DME)-fueled combustion engine. This study dealt with the reduction characteristics of HC and CO emissions, as well as a simultaneous decrease of NOx and soot in a DME-fueled single-cylinder combustion engine. Our findings demonstrate that increasing the global equivalence ratio while holding the intake oxygen flow-rate constant caused the premixed combustion duration (CA10-CA50) to increase. Additionally, it was observed that decreasing the intake oxygen flow-rate while holding the injection quantity constant shortens the duration of CA10-CA50. In this investigation, simultaneous reduction of soot and indicated specific (IS)-NOx emissions from a diesel engine can be achieved by fueling with DME and setting a high EGR rate (low intake oxygen flow-rate). Further, applying high equivalence ratio together with a high EGR rate resulted in a near zero level of soot and IS-NOR emissions in DME combustion. In addition, DME combustion yielded lower IS-CO and IS-HC emissions than diesel combustion, even with a low intake oxygen flow-rate.