Nowadays, the focus on renewable energy and alternative fuels has increased due to increase oil prices, environment pollution, and also concern on preserving the nature. Biodiesel has been known as an attractive alternative fuel although biodiesel produced from edible oil is very expensive than conventional diesel. Therefore, the uses of biodiesel produced from non-edible oils are much better option. Currently Jatropha biodiesel is receiving attention as an alternative fuel for diesel engine. Previous studies reported that Jatropha biodiesel was found to emit higher nitrogen oxides and lower smoke emissions compared to ordinary diesel. Exhaust gas recirculation is an effective technique to reduce nitrogen oxides emission from diesel engines; because it enables to lower both flame temperature and oxygen concentration in the combustion chamber. Some studies succeeded to reduce nitrogen oxides emission from biodiesel fuelled engines using exhaust gas recirculation. However, they observed increase in soot emission. The aim of this study was to investigate the optimum trade-off between reduction in nitrogen oxides and increase in soot emissions using exhaust gas recirculation for a compression ignition engine fuelled with Jatropha based biodiesel. A 4-cylinder, water-cooled, turbocharged, an indirect injection diesel engine was used for investigation. Exhaust emission characteristics were recorded and various engine performance parameters were also evaluated. The results showed that, at 5% exhaust gas recirculation rate along with Jatropha biodiesel blend effectively reduced both nitrogen oxides and soot emissions by 27 and 11.3%, respectively, compared to diesel fuel without exhaust gas recirculation.