Much research has been devoted to reducing NOx and soot emissions simultaneously in diesel engines. The low temperature combustion (LTC) concept has the potential to reduce these emissions at the same time, but it has limitations to its commercialization. In-cylinder EGR stratification is another combustion concept meant to reduce both types of emissions simultaneously using non-uniform in-cylinder EGR gas distribution. The EGR stratification concept uses a locally high EGR region of the in-cylinder so that the emissions can be reduced without increasing the overall EGR rate.In this study, the EGR stratification concept was improved with a CFD-based analysis. First, a two-step piston was developed to maximize the stratified EGR effect. Then, the feasibility of combustion and emission control by stratified EGR was evaluated under cases of artificially distributed EGR stratification and conventional diesel engine conditions.