Effects of oxygen content of fuels on combustion characteristics and emissions were investigated on both an optical single cylinder direct injection (DI) diesel engine and a multi-cylinder engine. Three fuels were derived from conventional diesel fuel (Finnish City diesel summer grade) by blending Rapeseed Methyl Ester (RME) or Diglyme and Butyl-Diglyme of different quantities to make their oxygen content 3%, 3% and 9%, respectively. The experimental results with three tested fuels show that the fuel spray development was not affected apparently by the oxygenating. Compared with the base fuel, the ignition delay to pilot injection was shortened by 0%, 11% and 19% for three oxygenated fuels, respectively. The ignition delay to main injection was shortened by 10%, 19% and 38%, respectively. With regard to emissions, the smoke level was reduced by 24% to 90%, depending on fuel properties and engine running conditions. The penalties of increased NOx emissions and fuel consumption were up to 19% and 24%, respectively.