A detailed experimental study has been conducted to evaluate the effect of 10% water emulsion diesel (ED10) on engine performance and emission, and comparison is made against base diesel fuel. The experiments were performed in a four cylinder 2.5 L DI turbocharged Toyota diesel engine at four different engine loading conditions (25%, 50%, 75% and 100% load). During experiments, the engine speed was varied from 800 rpm to 3600 rpm in steps of 400 rpm for each load condition. Results of in-cylinder pressure traces, heat release rate, engine power output, brake thermal efficiency and brake specific fuel consumption is presented as engine performance parameters while measurement of exhaust gas temperature, nitric oxide (NO) and carbon mono-oxide (CO) output is reported as emission parameters. It is noted that ED10 has the ability to produce comparable in-cylinder pressure and heat release rate like base diesel fuel. It is also found that ED10 produces slightly less engine power output with higher brake specific fuel consumption (BSFC). In addition, lower exhaust gas temperature and lower NO emission is experienced at all load and engine speed condition for ED10 as compared to diesel fuel. Although diesel engines are not prone to higher CO emission at medium to high engine load, it is found that ED10 suffers from higher CO emission at low load and low engine speed condition. However, at higher engine speed for a particular load, the CO emission reduces significantly. The comprehensive analysis of the experimental results suggests that ED10 has the potential to be considered as a competitive renewable and greener fuel for diesel engine applications. (c) 2012 Elsevier Ltd. All rights reserved.