A comparative experimental study on a 1.8L IDI diesel engine has been carried out to evaluate the influence of homogenized water in diesel emulsion on performance and exhaust emissions against base fuel diesel. The emulsions tested were diesel fuels by 5, 10 and 20 by volume of water. Experiments were conducted at full load condition and during testing; the engine speed was maintained in the range of 1000 to 4000 rpm and varied in steps of 500 rpm. Emission parameters NOx, CO, were measured. Reduction in exhaust temperature and smoke opacity was observed with all the tested emulsions. Contradictorily, NOX was found to be increasing with increase in water content which might be an outcome of a very weak or absence of the microexplosion phenomenon. Power was reduced, while specific fuel consumption of water in diesel emulsions was found to be higher than diesel. © TJPRC Pvt. Ltd.