With the purpose of reducing emission level while maintaining the high torque character of diesel engine, various solutions have been proposed by researchers over the world. One of the most attractive methods is to use dual fuel technique with premixed gaseous fuel ignited by a relatively small amount of diesel. In this study, Methane (CH4), which is the main component of natural gas, was premixed with intake air and used as the main fuel, and diesel fuel was used as ignition source to initiate the combustion.By varying the proportion of diesel and CH4, the combustion and emissions characteristics of the dual fuel (diesel/CH4) combustion system were investigated. Different cases of CFD studies with various concentration of CH4 were carried out. A validated 3D quarter chamber model of a single cylinder engine (diesel fuel only) generated by using AVL Fire ESE was modified into dual fuel mode in this study.The effect of concentration of CH4 in the mixture on the engine performance, the injection timing and injection rate of pilot diesel fuel, and exhaust emissions characteristics of dual fuel engine were investigated. Combustion characteristics such as ignition delay, cylinder pressure peak, and ROHR were also analyzed. The results show an increment of cylinder peak pressure and ROHR while decreasing the concentration of CH4. It is also found a decrement of emission level with the increment of the CH4 percentage.