A great deal of research is taking place at the present time in the field of diesel engines, especially regarding the emission of gaseous pollutants and soot. This research is essential for engine manufacturers since it is difficult for diesel engines to meet current standards regarding soot and nitric oxide emissions. The problem will become even more severe when the new legislation will be applicable requiring a 50% reduction of existing levels. Many manufacturers and researchers feel that engines will be difficult to meet this criterion without the use of other techniques such as gas aftertreatment or newly developed fuels (low sulfur content, etc.). The aim of this research is to examine the effect of fuel composition and physical properties on the mechanism of combustion and pollutants formation. For this purpose, an extended experimental investigation has been conducted in our laboratory on a single cylinder, naturally aspirated, four-stroke, air-cooled, direct injection, high speed, Lister LV1 diesel test engine. The engine has a bore of 85.73 mm, a stroke of 82.55 mm and a connecting rod length of 180 mm. The compression ratio is 18 and the normal operation speed range is between 1000 and 3000 rpm. A Bryce high-pressure fuel pump, having a 6.5 mm diameter plunger, is connected to the three-hole injector nozzle (each hole having a diameter of 0.25 mm) which is located in the middle of the combustion chamber head. The injector nozzle opening pressure is 190 bar. The combustion chamber of the engine is of the bowl-in-piston design. During the tests the static timing of the engine was held constant at 26 deg BTDC. Even though this engine is a rather old design (EURO-I technology) it is appropriate for the present work since our intention is to examine the effect of fuel composition on the combustion and pollutants formation mechanism. During these tests a number of fuels were used having different density, viscosity and mainly chemical composition, especially regarding the type of aromatics. A total of 9 fuels were used including standard commercial diesel fuel. During the tests measurements were taken at the tail pipe of emission values for soot, CO, NO and HC, while in addition measurements were taken using a fast sampling system of cylinder and fuel pipe pressure traces. By processing the measured pressure traces it was possible to determine the ignition delay of all fuels, the combustion intensity and therefore the effect of their physical and chemical properties on the combustion mechanism. Also, processing the measured exhaust pollutant values the effect of fuel properties upon them was determined. An important finding of this research is that physical properties have a considerable effect on both combustion mechanism and pollutant formation through mainly their effect on the fuel injection system performance. On the other hand, no serious effect of chemical composition was observed on soot and gaseous emissions. Another important finding was the serious effect of fuel physical properties and especially viscosity and density on the performance of the fuel injection system. They both the pressure values of the entire injection diagram and the residual pressure, which affect seriously the dynamic injection timing of the engine. From these it is also concluded that serious care must be taken when examining various fuels and their effect on engine emissions and performance; the dynamic injection timing must be held constant since the dynamic injection delay may be affected by the physical properties of the fuel. From the present analysis, it appears that the most important parameter is the physical properties of the fuel and not its chemical composition as far as the type of aromatic content is concerned.