Understanding the physics and chemistry involved in diesel combustion, with its transient effects and the inhomogeneity of spray combustion is quite challenging. Great insight into the physics of the problem can be obtained when an in-cylinder computational analysis is used in conjunction with either an experimental program or through published experimental data. The main area to be investigated to obtain good combustion begins with the fuel injection process and the mean diameter of the fuel particle, injection pressure, drag coefficient, rate shaping etc. must be defined correctly.The increased NOx production and reduced power output found in engines running biodiesel in comparison to petrodiesel is believed to be related to the different fuel characteristics in comparison to petroleum based diesel. The fuel spray for biodiesel penetrates farther into the cylinder with a smaller cone angle. Also the fuel properties between biodiesel and petrodiesel are markedly different. The difference in the properties leads to a lower mass flow rate, total injected mass, injection velocity and discharge coefficient for biodiesel in comparison to petrodiesel. This leads to a higher sauter mean diameter (SMD), poorer fuel atomization and changes in the combustion characteristics for the biodiesel. This affects the in-cylinder fuel distribution which then changes the temperature distribution which affects pollutant emission formation and power output.In this study, a numerical simulation was used to investigate the effect of soybean oil -based methyl ester biodiesel fuel properties on engine performance and emissions, and to compare the results with petrodiesel df2. The numerical model has already been validated with experimental results for df2 fuel in a Caterpillar3406 diesel engine in another study. It was seen in this study that the indicated power output of a single cylinder version of the Cat 3406 engine utilizing petrodiesel (DF2) was higher for all of the investigated biodiesel (BD) cases. While injection timing and duration did result in an improvement of the power output of the BD it was still less than the base case for DF2. By varying the injection timing and duration, the thermal efficiency of the BD was comparable to the DF2. Finally, the NOx formation for the BD was considerable less than that with the DF2.