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Combustion and emission characteristics of diesel and biodiesel blends (soybean methyl ester) were studied in a single-cylinder Direct Injection (DI) engine at different loads and a constant speed. The results show that NOx emission and fuel consumption are increased with increasing biodiesel percentage. Reduction of smoke opacity is significant at higher loads with a higher biodiesel ratio. Compared with the baseline diesel fuel, B20 (20% biodiesel) has a slight increase of NOx emission and similar fuel consumption. Smoke emission of B20 is close to that of diesel fuel. Results of combustion analysis indicate that start of combustion (SOC) for biodiesel blends is earlier than that for diesel. Higher biodiesel percentage results in earlier SOC. Earlier SOC for biodiesel blends is due to advanced injection timing from higher density and bulk modulus and lower ignition delay from higher cetane number.