A number of tests were conducted on a 2.5 litre, high-speed, direct-injection diesel engine running at various loads and speeds. The aim of the tests was to gain understanding which would lead to more effective use of exhaust gas recirculation (EGR) for controlling exhaust NOx whilst minimising the penalties of increased smoke emission and fuel consumption. In addition to exhaust emission measurements, in-cylinder sampling of combustion gases was carried out using a fast-acting, snatch-sampling valve. The results showed that the effectiveness of EGR was enhanced considerably by cooling the EGR. In addition to more effective NOx control, this measure also improved volumetric efficiency which assisted in the control of smoke emission and fuel consumption.This second of two papers on the use of EGR in diesel engines deals with the effects of EGR on soot emission and on the engine fuel economy. This paper should be read in conjunction with the first paper (SAE 960840) which deals with formation and control of NOx, and which contains more background information on the use of EGR in diesel engines and on the tests conducted .