The Diesel engine and especially the direct injection type one is considered to be one of the most efficient thermal engines known to man up to now. It has an efficiency that in some cases is 30 to 40% higher than its competitor the spark ignition engine. The efficiency of the direct injection diesel engine has been considerably improved during the last decade resulting to low fuel consumption and lower absolute values of pollutant emissions. If we consider the green house effect caused by the emitted CO2 it is revealed the environmental importance of high engine efficiency. In the present work a theoretical investigation is conducted using a detailed simulation model for engine performance prediction, to examine the possibilities for improving engine efficiency. The simulation model used is a complete open cycle model for the engine and its subsystems. Such phenomenological models are very suitable for the prediction of engine performance. If we examine the brake efficiency of an engine we observe that it depends mainly on two parameters, the efficiency of the thermodynamic cycle on which the engine is based and on the mechanical efficiency which reveals the amount of energy lost in the various mechanical components and subsystems of the engine. For this reason it is obvious that two are the main options for increasing engine efficiency, increase of the indicated efficiency or/and the mechanical efficiency. As a basis for the present investigation is used a heavy-duty six cylinder production DI turbocharged diesel engine. Using the simulation model we have determined that mainly increasing the injection timing or the intensity of combustion may increase the indicated efficiency. As far as mechanical efficiency is concerned it appears that the only solution for a serious improvement is to increase the power concentration of the engine. The last simply means to burn more fuel, which requires excess air and thus high turbocharging. Using the simulation model we have determined the effect of all previous parameters on engine efficiency and have determined limits as far as possible increase of efficiency is concerned. Furthermore we have determined the effect of these actions on the engine and mainly on its maximum combustion pressure. Using these results conclusions are derived concerning the ability we have to increase engine efficiency and the penalty we have to pay in these cases. Of course it remains to investigate the impact of these measures on pollutant emissions. This is currently under investigation and results will be available in the near future.