A new thermal cycle called 2-phase working fluid thermal cycle for diesel engine was proposed, which consists of the dual cycle and Rankin cycle. The noble cycle was analyzed by thermodynamic method and the forums to calculate performance indexes were deduced. Take water as the phase-changing fluid for example, the influence rules between injection parameters and cycle performance were studied. The result demonstrates that the injection of water could alleviate heat load and enhance the power of engine, while the efficiency would be decreased compared with the traditional dual cycle. When the injection mass of water and fuel are equal at one cycle, the efficiency drops by 5.79% and the power rises by 6.36%.