Alternative fuels, especially fuels based on biological matter, are gaining more and more attention. Not only as a pure substitute of oil but also in terms of a possibility for further reduction in emission and as an option to improve the global CO2 balance.For improving the engine performance (emissions, fuel consumption, torque and drivability) the adjustment of fuel injection, the fuel evaporation process and the combustion process itself is paramount. In order to exploit the full potential of alternative fuels excellent knowledge of the fuel properties, including the impact on ignition and flame propagation, is required. This needs suitable tools for analysis of the fuel injection and combustion process. These tools have to support the optimization of the combustion system and the dynamic engine calibration for lowest emissions and most efficient use of fuel.As the term “Alternative Fuels” covers a very wide area a brief overview on available fuel types will be made. Also, the main characteristics of the most promising alternative fuels as currently used for propelling mass production cars and in commercial engines will be mentioned. Alternative fuels have different combustion properties which need either special treatment in engine development and calibration or which can contribute in advantageous way to the engine performance. Typical problems related to combustion development and engine calibration as well as suitable measurement technologies will be explained.On gasoline engines combustion stability, misfire and knock behavior are in the focus. On diesel engines fuel economy, performance and emissions are of highest interest. For efficient engine optimization the combustion process including mixture preparation (fuel injection, evaporation, wall wetting, heat release and soot formation / oxidation) has to be analyzed and understood. Proven tools supporting that kind of analysis and enhancing the knowledge about the differences of alternative fuel compared to petrol based fuels will be presented in detail.Practical examples, i.e. realized engine development projects and the results of this kind of development work will be discussed. In addition, the future potential of the applied tools will be explained together with their usability in the process of optimization of the combustion system.