Diesel engine retarder performance varies as environment conditions change. An understanding of the mechanisms that produce this variance is gained through analytical consideration of ambient temperature, pressure and air moisture content. Retarding performance is quantified in an analytical model sensitive to these ambient parameters and their effect on system operating efficiency. Computer simulation is used to study the impact of ambient parameters on the turbocharged diesel engine and the compression release engine brake for a wide range of operating environments. Correlation with road performance is made to illustrate environment impact on maintained heavy vehicle downhill road speed.