The effect of fuel properties on the performance of a new type of diesel engine with fuel jet impingement was investigated in comparison with the performance of a DI diesel engine.The new engine has a unique mixture formation process, but the details have not been well investigated. Therefore, the combustion processes of the engine was observed with a transparent piston engine and a high-speed camera system. Observations of the combustion process showed that after impingement, the fuel diffused almost symmeterically into the shape of a disk. Ignition usually started near the cavity wall and extented toward the center of the combustion chamber. The flame appeared to extend from the inside cavity radius to the outside cavity radius because of the strong squish flow.The fuel consisted of petroleum derived samples with a wide range of cetane number and viscosity. High cetane number resulted in reduced NOx mass emission from both engines, but an increased amount of smoke was emitted. However, the smoke level for the new engine was much lower than that for the DI engine. The fuel economy of the new engine was greatly improved by fuel with a high cetane number, compared with the results for the DI engine. Emission and fuel economy were worse with increase in viscosity for both engines, but the degree of deterioration for the new engine was greater than that for the DI engine. This difference in behavior of the two engines depend on the mixture formation process.