The oxygen-enriched intake air technology was applied in a DI diesel engine, the volume fraction of oxygen as follows: 21%, 22%, 23% and 24% respectively. The effect of matching between pure diesel, 10%, 20% and 30% water emulsion diesel on combustion or emission was investigated and simulated. The experiment and simulation were both carried out under the maximum torque working condition of the test engine. The result revealed that under the conditions of burning same emulsion diesel, with the increase of oxygen concentration, the ignition timing decreased and the max pressure increased. Under the same intake air condition, the ignition timing will be delayed with the increase of water rate in emulsion diesel. The ignition timing and combustion rate could be controlled through different water-emulsion rates matched with different oxygen concentrations in intake air. Using 30% water emulsion diesel, the lower combustion temperature made the NO emission lower than original engine’s NO emission, even though the oxygen reached 24% in intake air. Burning 20% water emulsion diesel, when oxygen concentration is below 22%, the NO emission is better than original. The 10% water emulsion only combustion in air, which NO emission is better than original. With increasing of oxygen concentration in intake air and water rate in emulsion diesel, the smoke emission is lower than original engine. Analysis on combustion temperature with the chamber impress-cuts of TDC, ATDC 4°CA and ATDC 10°CA, the water content in emulsion diesel has great impact on low-temperature chemical reaction and the oxygen concentration in intake air is more effective on high-temperature reaction. 