Low temperature combustion (LTC) may allow simultaneous reduction of nitrogen oxides (NOx) and soot with acceptable compromise in the efficiency of a diesel engine. Recently oxygenate biodiesel fuels were tested to resolve the problem of CO emission at higher exhaust gas recirculation (EGR) rates in LTC operation. In this paper 3-D simulation is performed by KIVA with soybean biodiesel blends of D100 and BD20 for a heavy duty test engine. The oxygen fraction in intake gas is controlled between 7% and 19% to simulate EGR in LTC operation. A surrogate mechanism is constructed by combining the skeletal mechanisms of methyl butanoate (MB) and n-heptane for low and high temperature chemistry. It consists of 76 species and 243 reaction steps with detailed NOx chemistry. The conditional moment closure (CMC) model is employed to address coupling between turbulence and chemistry. Results show acceptable agreement with measured pressure traces, heat release rates and CO, NOx and particulate matter (PM) emissions. There is no significant difference between D100 and BD20 for ignition delays in the test conditions. CO is suppressed for BD20 in LTC, while soot decreases in LTC with minor effects of oxygenate fuel. NOx is reduced by a lower heating value of BD20 at low EGR rates. A possible range of LTC operation is estimated through parametric study with different start-of-injection timings in the baseline condition.