ABSTRACT As consequence of the economic development, cars are sharply increased, making humans more dependent on oil. The shortage of energy source is one of the most important serious problem that human confronted with. A the same time, environmental pollution increased as serious problem, in which emission pollution from vehicle becomes one of the main source. The concern to the emission from diesel engine has led efforts to select alternative-renewable fuels. Bio-diesel as a promising alternative fuels has obtained much attention as alternative for diesel fuel. Bio-diesel is refers to vegetable oil or animal fats-based diesel fuel produced through esterification reaction of the long chain fatty acid ester composition of new raw material, belong to the renewable energy. Bio-diesel has similar performance to diesel fuel. Bio-diesel, which is low sulfur, contain no aromatics, doesn't increase the carbon dioxide emissions, has excellent environmental protection aspect. Bio-diesel is promising good performance since its hexadecane value and oxygen content is high, and also has good lubricity properties. Bio-diesel is also biodegradable, and has high flash point, low volatility, non-toxic, and good safety. Bio-diesel can be mixed with petroleum diesel in any ratio in order to replace neat diesel fuel to get more environmental friendly renewable and cleaner fuel. Bio-diesel's application can meet the world energy development strategy and the target of energy structure adjustment, demands for protecting the environment, and to reduce greenhouse gas emissions to have the important meaning. The present paper analysed the engine performance, combustion and exhaust emissions characteristics of a diesel engine (TD950) without any modification fuelled by diesel and three bio-diesel blends with different ratio (D100, BD25, BD45 and BD65), in order to study the use of clean fuel to meet the increasingly stringent emission regulations. The engine performance and combustion characteristics was examined by using engine dynamometer; while an exhaust gas analyzer was used to examine the emission characteristics. The main conclusions of this study are that combustion characteristics of bio-diesel showed the shorter ignition delay and the earlier ignition, the earlier and lower of the peak value of heat release rate, the decrease of diffusive combustion speed and the prolonging of combustion duration. The effect of biodiesel to the engine performance the decrease the power and on the other hand the increase in fuel consumption. As for emission characteristics the results showed that the exhaust gas temperature decreased. the opacity, CO, CO2 and HC emissions also decreased; while and the NOx slightly increased.