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Exhaust gas recirculation (EGR) is an effective means to reduce NOx emissions in Diesel engines. An innovative concept of EGR admission was developed for diesel engine of heavy-duty application. A 4-cylinder, naturally aspirated, water-cooled engine was selected for experimental investigation. One-dimensional simulation software was used to predict emission and performance parameters. The engine model was initially validated with experimental data and then used for parametric study for EGR. The best EGR flow rates were determined for experimental study, to study the effect of EGR on engine emissions. A significant reduction in emissions of NOx with minimal increase in CO and HC emission was achieved. Based on number of experiments and simulations an innovative EGR system was developed to control flow of hot exhaust back into the intake manifold for NOx reduction.