Butanol, which is a renewable biofuel, has been regarded as a promising alternative fuel for internal combustion engines. When blended with diesel and applied to pilot ignited natural gas engines, butanol has the capability to achieve low soot emissions without sacrifice on thermal efficiency. However, high blend ratio of butanol is limited by its longer ignition delay caused by the higher latent heat and lower octane number, which restricts the further reduction of soot emissions. In this paper, the potential of increasing butanol blend ratio by adding hot EGR is investigated. 3D CFD model based on a detailed kinetic mechanism is built and validated by experimental results of natural gas engine ignited by Diesel-Butanol blends. The effects of hot EGR is then revealed by the simulation results of the combustion process, heat release traces and also the emissions under different diesel-butanol blend ratios. As hot EGR induced both higher temperature and higher carbon dioxide concentration, the simulation results are compared to that of cooled EGR to separate the temperature and gas composition effects. To get a better fundamental understanding of the EGR effects, the phenomenon is explained by the aid of chemical kinetics.