Experiments have been carried out on a diesel engine to estimate changes of smoke and NOx emission under different load conditions when using DMM blended fuel which mixed with diesel oil and dimethoxy methane （DMM） and using pure diesel oil. At the same time, the effect of EGR to smoke and NOx emission has been tested. Test results show that with the increase of DMM blended ratio the emission of smoke was decreased but NOx emission increases. With EGR ratio increasing NOx emission has been well controlled but smoke emission was deteriorated. It was found that using DMM blended fuel and controlling EGR rate at about 10% ～ 15 % can achieved the purpose for reducing smoke and NOx emission simultaneously.