In this study, combustion processes and emissions of a direct-injection diesel engine fueled with DME were analyzed at idle engine speed. An optical single-cylinder diesel engine equipped with a common-rail fuel injection system was constructed to investigate combustion processes of DME. The images were recorded by a high-speed digital video camera. Tests were performed at fixed engine speed with various injection and flow parameters. The results demonstrated that the DME-fueled engine was superior to the conventional diesel engine in terms of thermal efficiency and emissions. The optimal injection timing of DME was around TDC, which was roughly same as that of diesel fuel. For a very early injection, NOx levels increased considerably because the combustion temperature increased when injection occurred much earlier than TDC. NOx emission of'DME was same or a little higher than that of diesel fuel at the same injection pressure and injection timing because of higher evaporation characteristics of DME. Throughout all experimental conditions, DME did not produce any measurable smoke levels. Moreover, the injection timing was controlled so early hat the homogeneous charge could be formed. Easily evaporated DME showed the promising ability for engine to be operated in a homogeneous charge compression ignition (HCCI) combustion.