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This paper presents technical solutions and a development process to accomplish not only superior fuel economy but also excellent driveability with a turbocharged diesel engine for heavy duty trucks. For better fuel economy, one of the basic considerations is how to decrease the friction losses of the engine itself while keeping the required horsepower and torque characteristics. A high boost turbocharged small engine offers this possibility, but it has serious disadvantages such as inferior low speed torque, poorer accelerating response, insufficient engine braking performance, and finally not always so good fuel consumption in the engine operating range away from the matching point between engine and turbocharger. These are not acceptable in complicated traffic conditions like those in Japan - a mixture of mountainous and hilly roads, city road with numerous traffic signals, and freeways.