This paper concerns mainly with the research work of diesel nitrogen oxide reduction by Exhaust Gas Recirculation (EGR). Using exhaust gas cleaned by a high efficiency bag filter as EGR gas, a 1110 DI diesel engine test bed was set up, and tests were made to investigate the EGR effects on engine performances, including engine emissions and fuel economy. The results showed that the EGR could be used as an effective way to reduce diesel nitrogen oxides with very little economy penalty. When the engine works at low or moderate loads, 25 to 40 percent of the EGR rate is good for better trade-off of engine economy and emissions. The nitrogen oxide reduction efficiency can be as high as 50% to 60% based on emission concentrations, and can be even higher based on total exhaust gas emissions of nitrogen oxides. Larger EGR rate can attain higher nitrogen oxide reduction efficiency, but the engine economy, HC and CO emissions will worsen. At heavy load, the engine economy tends to deteriorate sharply, no EGR or little EGR rate should be required.