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A diesel engine with a dual-fuel (methanol-diesel) injection system has been developed, and the practicality of a prototype bus equipped with the developed engine has been confirmed. This study showed that methanol could be substituted for diesel fuel at the rates of 86 vol. percent in transient mode operation and 94 vol. percent in steady-state operation. Driving performance was equivalent to that of a conventional bus. Fuel economy of the dual-fuel injection engine was the same as that of a conventional diesel engine in steady-state operation, and decreased by about 9 percent in transient mode operation. The dual-fuel injection engine met the Japanese regulations on exhaust emissions stipulated in 1979. Exhaust smoke and particulate emissions were extremely reduced to the level of smoke-free operation.