Ultra low emissions and high performance combustion was achieved with a combination of high EGR, a three-way catalyst, and a highly oxygenated liquid fuel, neat dimethoxy methane (DMM), in an ordinary DI diesel engine. The smokeless nature of neat DMM effectively allowed stoichiometric diesel combustion by controlling BMEP with EGR. NOx, THC, and CO emissions were reduced with a three-way catalyst. At lower BMEP with excess air, the EGR effectively reduced NOx. High-speed video in a bottom view type engine revealed that luminous flame decreased with increased fuel oxygen content and almost disappeared with DMM.