Working process of diesel engine refers to airflow, turbocharger, fuel injection, combustion, heat transfer and chemical reaction powers etc. Hence, it influences power output, fuel consumption, combustion noise and emissions, moreover directly influences reliability and durability of diesel engine. The working process of 6106 diesel engine is simulated by large universal internal combustion engine working process numerical simulation software GT-Power in this paper, and the effects of compression ratio, fuel supply advance angle and valve timing system on performance of diesel engine are analyzed. When valve-timing system is studied, the influence of intake valve close timing, exhaust valve open timing and valve overlap angle on performance are analyzed. On different operating conditions, the different timing of intake close and exhaust open, valve overlap were computed and analyzed. Finally, at different engine conditions, various optimum results were obtained. The results and test data before and after optimization were compared, and the test data validate the results. The calculation results can provide theoretic guidance for optimal designs of diesel engines.