Diesels are making ground in the world&s engine markets, and this tendency is now more apparent than the growth and technical pregress of small diesel engines. The performance of the fuel injection system clearly plays the crucial role in the promotion of diesel engine and its applications, and the pressure on reserach and development are especially severe in this area. These include (a) completion of small and light weight units, (b) compliance with exhaust gas legislation, (c) reaction to fuel economy research as with the direct and high pressure injection systems, (d) development of new techniques for precise adjustment of spray and injection, (e) reaction to fuel versatility such as low grade fuel and (f) achievement of lower costs. (1)*In all of these area we must work for better quality, cost saving, maneuverbility, comfort, safety and higher reliability for both the engines and their machines. More efforts into research and development shall be invested to meet the higher requirements of technology.Under the circumstances, we have now developed the new small size, light-weight and low-cost fuel injection equipment. This can be adopted to small diesel engines for variety of purpose.In this paper, we will introduce the characteristics and features of our new fuel injection equipment, primarily Model: YPFE-M injection pump. These items have been well matched with our new engines in combination with improvements of injection nozzle and fuel pipe.Then we will describe the development of the direct injection air cooled diesel engines, which are one of the smallest diesels in the world, and with the new fuel injection equipment, it displays superb fuel consumption, emission and noise characteristics.