Biodiesel is a widely used biofuel in diesel engines, which is of particular interest as a renewable fuel because it possesses the similar properties as the diesel fuel. The pure soybean biodiesel was tested in an optical constant volume combustion chamber using natural flame luminosity and forward illumination light extinction (FILE) methods to explore the combustion process and soot distribution at various ambient temperatures (800 K and 1000 K) and oxygen concentrations (21%, 16%, 10.5%). Results indicated that, with a lower ambient temperature, the autoignition delay became longer for all three oxygen concentrations and more ambient air was entrained by spray jet and more fuel was burnt by premixed combustion. With less ambient oxygen concentration, the heat release rate showed not only a longer ignition delay but also longer combustion duration. The flame volume increased as the oxygen concentration decreased at all ambient temperatures, and more combustion occurred at near wall region at lower oxygen concentrations. The total soot mass was reduced with the decrease of oxygen concentrations at 800 K ambient temperature because the soot generation rate was reduced due to a lower combustion temperature at lower oxygen concentration. However, at 1000 K ambient temperature, the total soot mass was higher compared with the 800K ambient temperature and the total soot mass was increased with the decrease of oxygen concentrations. In addition, the total soot mass was found sensitive to the ambient temperature at 10.5% oxygen concentration. Therefore, an ultra low oxygen concentration, usually encountered under extremely heavy EGR conditions, will increase the difficulty of combustion and soot emissions control in a real diesel engine.