From the perspectives of environmental conservation and energy security, dimethyl-ether (DME) is an attractive alternative to conventional diesel fuel for compression ignition (CI) engines. This review article deals with the application characteristics of DME in CI engines, including its fuel properties, spray and atomization characteristics, combustion performance, and exhaust emission characteristics. We also discuss the various technological problems associated with its application in actual engine systems and describe the field test results of developed DME-fueled vehicles. Combustion of DME fuel is associated with low NOx, HC, and CO emissions. In addition, PM emission of DME combustion is very low due to its molecular structure. Moreover, DME has superior atomization and vaporization characteristics than conventional diesel. A high exhaust gas recirculation (EGR) rate can be used in a DME engine to reduce NOx emission without any increase in soot emission, because DME combustion is essentially soot-free. To decrease NOx emission, engine after-treatment devices, such as lean NOx, traps (LNTs), urea-selective catalytic reduction, and the combination of EGR and catalyst have been applied. To use DME fuel in automotive vehicles, injector design, fuel feed pump, and the high-pressure injection pump have to be modified, combustion system components, including sealing materials, have to be rigorously designed. To use DME fuel in the diesel vehicles, more research is required to enhance its calorific value and engine durability due to the low lubricity of DME, and methods to reduce NOx, emission are also required. (C) 2014 Elsevier Ltd. All rights reserved.