Fuel economy improvements have been responsible for the increased interest in Diesel engines for light duty vehicles. However, improvements in gasoline engine fuel economy, more stringent emission requirements and reductions in fuel quality pose technical challenges to the Diesel engine. Reductions in fuel quality increase emissions, noise and cold starting difficulty. Electronic controls, combustion chamber modifications, and particulate traps, which are not yet feasible, can reduce emissions. Improvements in fuel economy can result from reductions in friction, the use of direct injection and reductions in heat loss to approach adiabatic operation, but with increased costs. Future non-petroleum fuels could differ from Diesel fuel and affect combustion performance. Since the cetane number may not predict combustion performance of future fuels, a new concept for evaluating Diesel fuels is suggested. A direct injection, ignition assisted engine, if successfully developed, could operate on a variety of fuels with high overall energy utilization efficiency.