This paper presented the analytical results for the energy balance of a diesel methanol dual-fuel (DMDF) engine. A methanol injection system was fixed on a diesel engine and let the engine to alternate to run in either the pure diesel (D) mode or DMDF mode. Primary application of the thermal balance analysis was to investigate the cause of methanol replacement ratio SR changing with engine loads. Calculations were conducted within the control volume by comparing each of the energy terms. The results show that the reduction in cooling loss in DMDF mode is the dominant factor for low SR at high loads. While, a substantial increase in incomplete combustion loss in DMDF mode is the most important reason for high SR at low loads. Another application of the thermal balance analysis was to research the cooling loss in DMDF mode which implied unique characteristics. Therefore, the changing methanol replacement rate SP experiments were carried out in various engine loads, giving the results that the cooling loss in DMDF mode is always lower than that in D mode, and it goes even lower as SP rises. Finally, the effect of methanol temperature on SR was also investigated from the thermal balance point of view. The results reveal that the incomplete combustion loss decreasing in higher methanol temperature conditions will lead to a certain extent of SR drop. All these results are related to the energy flow distribution within the engine. (C) 2015 Elsevier Ltd. All rights reserved.