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This paper describes development challenges for Heavy-Duty (HD) on-highway Diesel Direct Injection (DDI™) engines to meet the extremely advanced US-EPA 2010 (later named US 2010) emission limits while further increasing power density in combination with competitive engine efficiency. It discusses technologies and solutions for lowest engine-out emissions in combination with most competitive fuel consumption values and excellent dynamic behavior. To achieve these challenging targets, base engine hardware requirements are described. In detail the development of EGR systems, especially the challenges of running high EGR rates over the whole engine speed range also at high load, the dynamic EGR control for transient engine operation to achieve lowest NOx emissions at the smoke limit with excellent load response is discussed. Also the effect of the turbo-machinery on power density and transient engine behavior is shown.