Experiments were conducted with 4-cylinder and single-cylinder direct injection diesel engines to examine the effects of combustion chamber insulation on heat rejection and thermal efficiency. The combustion chamber was insulated by using a silicon nitride piston cavity that was shrink-fitted into a titanium alloy crown. The effect of insulation on heat rejection was examined on the basis of heat release calculations made from cylinder pressure time histories. High-speed photography was used to investigate combustion phenomena. The results showed that heat rejection was influenced by the combustion chamber geometry and swirl ratio and that it was reduced by insulating the combustion chamber. However, because combustion deteriorated, it was not possible to obtain an improvement in thermal efficiency equivalent to the reduction in heat rejection. High-speed combustion photographs revealed that the application of heat insulation reduced the angular velocity of the flame in combustion chamber by 10∼20%. This reduction in the angular velocity of the flame was found to be one cause of combustion deterioration when heat insulation is applied to the combustion chamber.