Diesel engines are mostly used in industries and transportation sectors while compared to petrol engines. The Diesel engine produces the emissions such as NO x , HC, PM and CO. It affects the environment and human health also. In the recent field water diesel emulsion is studied and replaced by the diesel. Water, diesel emulsion reduces the NO x and due to the reduction in the temperature. Our aim is reduce the NO x without compensating the engine performance. Then performance and emission test were carried out by using the fuel in a single cylinder water cooled engine. Here the emulsion 1 & emulsion 2 are compared with the diesel and it is found that the emulsion 2 is the best alternative to diesel.