Previous research has shown that the reduced nozzle hole diameter and elevated injection pressure are effective for preparing a uniform fuel-air mixture in a direct injection (D.I.) Diesel engine. A micro-hole nozzle with a hole diameter of 0.08 mm and an ultra-high injection pressure of 300 MPa have been employed to investigate the mixture formation process under various conditions. The aim of the current work is to clarify the effect of nozzle hole diameter and injection pressure on flame lift-off and soot formation processes. The free sprays from the micro-hole and conventional nozzles were investigated at a high-temperature, high-pressure constant volume vessel. A high-speed video camera system was employed to record the non-vaporizing sprays and combustion. The direct photography of OH chemiluminescence was used to provide information about the high temperature combustion process and to measure the flame lift-off length. The two-color method was used to measure the flame temperature and soot concentration distributions. The measured penetration lengths for non-vaporizing and vaporizing sprays were compared with the predicted results using the penetration scaling law. The potential of the high injection pressure for reducing the soot formation was discussed. The data on entrainment and vaporization acquired in the vaporizing sprays using the laser absorption-scattering (LAS) technique were correlated to the flame spreading, lift-off, and soot formation processes. The experimental findings provided useful information for implementing the micro-hole nozzle and ultra-high injection pressure to achieve the premixed charge compression ignition (PCCI) combustion in engine application.