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The 1997 Kyoto protocol came into effect in February, 2005 to reduce greenhouse gases within the period 2008-2012 by at least 5 % with respect to 1990 levels. Application of biodiesel fuel (BDF) to diesel engine is very effective to reduce CO2 emission, because BDF is carbon neutral in principle. The purpose of this project is to produce a light-duty biodiesel truck which can be suitable for emission regulation in next generation. The effect of BDF on the performance and emissions of modern diesel engine which was equipped with the aftertreatment for PM and NOx emissions was investigated without modifications of engine components and parameters, as a first step for research and development of biodiesel engine. Rapeseed oil methyl ester (RME) was selected in behalf of BDF, and combustion characteristics, engine performance and exhaust emissions were made a comparison between RME and petroleum diesel fuel by steady operation and Japan transient mode (JE05) tests.