In this study it is tried to reduce NOx and particulate emissions simultaneously in a direct injection diesel engine based on the concept of two-stage combustion. At initial combustion stage, NOx emission is reduced with fuel rich combustion. At diffusion combustion stage, particulate emission is reduced with high turbulence combustion. The high squish combustion chamber with reduced throat diameter is used to realize two-stage combustion. This combustion chamber is designed to produce strong squish that causes high turbulence. When throat diameter of the high squish combustion chamber is reduced to some extent, simultaneous reduction of NOx and particulate emissions is achieved with less deterioration of fuel consumption at retarded injection timing. Further reduction of NOx emission is realized by reducing the cavity volume of the high squish combustion chamber.Analysis by endoscopic high speed photography and CFD calculation describes the experimental results. Endoscopic photography shows that in the high squish combustion chamber, the high luminosity flame is observed beneath the squish lip until middle diffusion combustion stage. However, in the original toroidal combustion chamber, whole chamber is filled with brilliant flame from early combustion stage. The CFD calculation shows that in the high squish chamber, strong turbulence caused by intensified squish and high swirl produces a complex air motion with which spirally rotating mixture forms beneath the squish lip in the cavity. When the mixture burns, violent expansion flow toward the cavity center occurs, a part of burned gas is rolled back into the mixture again. It is also found that in the high squish combustion chamber fuel-rich mixture burns mainly in the cavity, and less unburned fuel spreads out to the clearance volume. The results of the CFD calculation agree with those of the endoscopic photography.It is suggested that strong swirl and squish obtained by combustion chamber geometry produce fuel-rich and high turbulence combustion, which results in the reduction of NOx and particulate emissions.