This paper provides an insight into the design of a compound combustion chamber, with square and circular cavities, for use in a direct-injection diesel engine. Automotive diesel engines using square combustion chamber design have shown improvement in oxides of nitrogen and particulate exhaust emissions. In spite of this, neither the quality of mixture formation in such chambers nor the relationship between the engine performance and combustion chamber designs have been adequately addressed. Compound combustion chambers have potential to combine attributes of square and circular chambers to provide improved engine performance. An experimental study, based on liquid injection technique (LIT), was conducted to evaluate mixture formation in compound combustion chambers of different designs. These chambers have square geometry of depth "h" at the top and a curricular cavity at the bottom, with the total chamber depth being "H." The influence of the quadrangle corner part on mixture formation was evaluated by LIT technique and validated through experimental work on a single- cylinder, DI diesel engine. The bench investigation was conducted by using model chambers where the depth ratio, h/H, was varied from 0.3 to 1.0. The quality of mixture formation was evaluated by analyzing optical transmissivity of the fuel spray emulsion in the liquid chamber. Similar shape combustion chambers were then employed in a single-cylinder, 4-stroke, DI diesel engine. The combustion chamber cavity with h/H = 0.65 showed lower optical transmissivity indicating better fuel spray dispersion in the chamber. These results were verified through engine experiments that showed lower fuel consumption and lower exhaust emissions at this depth ratio. The combustion chamber with h/H = 0.65 produced a peculiar turbulence to aid in mixture formation in the upper square corners of the chamber. These characteristics of the compound chamber of cavity ratio h/H = 0.65 are believed to be responsible for improved performance of the DI diesel engine.