Retarded injection is used to control NOx emissions. Exhaust Gas Recirculation (EGR) is also an effective means of reducing NOx emissions from compression ignition engines. Higher fuel injection pressure may improve the combustion. EGR can be combined advantageously with other emission reducing measure such as retarded injection timing and performance improvement measures such as higher fuel injection pressure to have a good effect. The methyl ester of jatropha oil, known as biodiesel, is receiving increasing attention as an alternative fuel for diesel engines. Biodiesel is a non-toxic, biodegradable and renewable fuel with the potential to reduce engine exhaust emissions. The jatropha oil methyl ester was obtained through transesterification process. Various properties of the biodiesel thus developed were evaluated and compared in relation to that of conventional diesel oil. In the present investigation neat jatropha oil methyl ester (JME) as well as the blends of varying proportions of JME and diesel were used to run a CI engine with standard conditions (No EGR, No Injection Retard and 20 MPa Fuel Injection Pressure) and with combination of 20 % EGR, 4° retarded injection timing and 30 MPa fuel injection pressure. The addition of jatropha oil methyl ester (JME) to diesel fuel has significantly reduced HC, CO and smoke emissions but it increases the NOx emissions slightly with standard conditions. The NOx emission was drastically decreased with modified conditions. Further the smoke and unburned hydrocarbon emissions were decreased with modified conditions as compared to standard conditions. The brake thermal efficiency was improved with modified conditions at various loads. Exhaust gas temperatures were similar. The maximum cylinder gas pressure and heat release rate were lowered.