Optimization of geometric and operating parameters controlling the fuel injection rate of in-line pump-based fuel injection system for small-sized industrial DI diesel engines can be obtained using computer models simulating simultaneously the flow inside the fuel injection system and the subsequent spray development. Empirical sub-models accounting for the effect of injection hole cavitation both on hole exit velocity and on the atomization of the injected liquid have been included in order to enhance model predictions. Validation of the FIE model s performed by comparing model predictions against experimental data for the pumping chamber pressure, delivery valve lift, line pressure, needle lift and injection rate for various pump designs and for a wide range of pump operating conditions. The results confirm that the FIE simulation model is capable of predicting the flow characteristics inside the fuel injection system for all cases investigated. Parametric studies investigating the influence of nozzle specifications on hole flow exit characteristics are then performed and used as initial conditions to the CFD spray model which predicts the subsequent detailed spray droplet characteristics taking into account the liquid core atomization, droplet secondary break-up, droplet collisions, droplet drag coefficient and droplet turbulent dispersion processes. The results have revealed the important influence of the design of various geometric parameters of the fuel injection system on the spray structure.