This paper reports on the effect of water emulsified diesel fuel combustion on brake thermal efficiency, brake specific fuel consumption, oxides of Nitrogen (NOx) and Hydrocarbon emissions in a diesel engine. The experiments were conducted on a single cylinder four stroke cycle diesel engine. The experiment was carried out with the 10% and 20% water blended diesel by taking Polysorbate 20 as solvent. Tests were performed using a commercial fuel as a reference and an emulsified fuel for each operating condition. Results reported here suggest that the water emulsification has a probable to improve brake thermal efficiency and break specific fuel consumption. Emulsions of diesel and water are often promoted as being able to overcome the difficulty of simultaneously reducing emissions of both oxides of nitrogen (NOx) and hydro carbon emissions in a diesel engine.