The effects of engine parameters, such as spray characteristics and combustion chamber geometry on performance and exhaust emissions in a small D.I. diesel engine were investigated to find out the optimum way of improving the engine. Diesel spray injected into a high-pressure vessel was photographically analyzed to guess the spray behavior in a firing diesel engine. The ratio of hole length to the diameter of a nozzle (L/D) was varied from 3 to 7 as the main parameter of the nozzle. Piston cavity diameter and intake swirl were chosen as the other parameters. The effect of the above parameters was investigated in terms of brake specific fuel consumption (BSFC), exhaust smoke, nitric oxides (NOx) and total hydrocarbon (THC). The L/D of the nozzle is concluded to be of major importance in terms of BSFC and THC emission. Smaller piston cavity diameters lead to lower exhaust smoke, but to a higher level of NOx emission. A tight correlation for minimizing BSFC was observed between the spray tip penetration from the nozzle and the optimum diameter of the piston cavity. A statistical analysis would be helpful in comprehending the effects of engine parameters on performance and exhaust emissions.