This paper investigates combustion characteristics and decides the optimal operating factors by a Taguchi method on a diesel engine using diesel/biodiesel mixture with liquefied petroleum gas (LPG) and cooled exhaust gas recirculation (EGR) inducted in the intake port. The optimal operating factors for acquiring the largest fuel consumption time, the lowest smoke and NOX are decided for 1500 rpm and different loads. In addition, this study compares the combustion characteristics (heat release rate and ignition delay) and emissions (NOX and smoke) between the optimum combination of factors and baseline diesel engine. The results display that predictions by Taguchi method are in fair consistence with the confirmation results, and this method decreases the number of experimental runs in this study. The best fuel consumption time, smoke, and NOX at each load is acquired at a combination of B10 (A(1)), 40% LPG (B-3) and 20% EGR ratio (C-1). Moreover, the heat release rate for engine conditions is computed using a variable specific heat ratio by the experimental in-cylinder pressure. Furthermore, the best combination decreases both smoke and NOX emissions. The decrease rate is 52% for smoke and 31% for NOX at 60% engine load. (C) 2013 Elsevier Ltd. All rights reserved.