Exhaust Gas Recirculation (EGR) is an important parameter for control of diesel engine combustion, especially to achieve ultra low NOx emissions. In this paper, the effects of EGR on engine emissions and engine efficiency have been investigated in a heavy-duty diesel engine while changing combustion control parameters, such as injection pressure, injection timing, boost, compression ratio, oxygenated fuel, etc. The engine was operated at 1400 rpm for a cycle fuel rate of 50mg. The results show that NOx emissions strongly depend on the EGR rate. The effects of conventional combustion parameters, such as injection pressure, injection timing, and boost, on NOx emissions become small as the EGR rate is increased. Soot emissions depend strongly on the ignition delay and EGR rate (oxygen concentration). Soot emissions can be reduced by decreasing the compression ratio, increasing the injection pressure, or burning oxygenated fuel. The effect of boost on soot emissions depends on the EGR rate. With increased boost, soot emissions decreased below the medium EGR rate, but the peak soot value increased. With heavy EGR, Low Temperature Combustion (LTC) occurred with ultra low NOx and soot emissions simultaneously, NOx emissions meet Euro VI regulations without any DeNOx aftertreatment. However, the fuel efficiency of LTC is much lower than that of conventional diesel combustion with ultra high HC and CO emissions. The “Trade-off” of soot-NOx for conventional combustion changes to a “Trade-off” of soot-fuel efficiency (HC and CO emissions). With medium EGR, there is almost no fuel penalty, HC, CO and soot emissions are low, but NOx emissions cannot meet Euro VI without aftertreatment. Further analysis indicated that the emissions and fuel efficiency could be optimized by changing following: the injection timing, injection pressure, boost, and adding oxygenated fuel. Therefore, the authors think that diesel combustion controlled by medium EGR is a promising method to meet future emissions regulation with high fuel efficiency.