The compression ignition combustion fuelled with hydrogen and dimethyl-ether was investigated. Exhaust gas recirculation was applied to reduce noise and nitrogen oxide (NOx) emission. When dimethyl-ether was injected earlier, combustion showed two-stage ignitions known as low temperature reaction and high temperature reaction. With advanced dimethyl-ether injection, combustion temperature and in-cylinder pressure rise were lowered which resulted in high carbon monoxide and hydrocarbon emissions. However, NOx emission was decreased due to relatively low combustion temperature. The engine combustion showed only high temperature reaction when dimethyl-ether was injected near top dead center. When exhaust gas recirculation gas was added, the in-cylinder pressure and heat release rate were decreased. However, it retarded combustion phase resulting in higher indicated mean effective pressure. The carbon monoxide and hydrocarbon emissions were increased and NOx emission was decreased with exhaust gas recirculation was added. In this study, low-emission, hydrogen-DME compression ignition engine was achieved through the DME injection strategy and EGR.