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The Fischer-Tropsch (FT) process can be used to synthesize diesel fuels from a variety of energy sources, including coal, natural gas and biomass. Diesel fuels produced from the FT process are essentially sulfur-free, have very low aromatic content, and have excellent ignition characteristics. Because of these favorable attributes, FT diesel fuels may offer environmental benefits over transportation fuels derived from crude oil. Previous tests have shown that FT diesel fuel can be used in unmodified engines and have been shown to lower regulated emissions. Whereas exhaust emissions reductions from these previous studies have been impressive, this paper demonstrates that far greater exhaust emissions reductions are possible if the diesel engine is optimized to exploit the properties of the FT fuels. A Power Stroke 7.3 liter turbocharged diesel engine has been modified for use with FT diesel.