The present investigation was to study the performance, combustion and emission characteristics of homogeneous charge compression ignition (HCCI) combustion of diesel fuel with external mixture formation technique. A stationary four stroke, single cylinder, direct injection diesel engine capable of developing 4.4 kW at 1500 rpm was modified to operate in HCCI mode. To achieve homogeneous mixture, diesel fuel was inducted in vapour form by using a diesel fuel vaporizer. The fuel vaporizer was mounted in the intake system to provide diesel vapour, which is mixed with air and inducted into the cylinder. To control the early ignition of diesel vapour-air mixture, cooled EGR technique was adopted. Experiments were conducted with diesel vapour induction without EGR and diesel vapour induction with 10% EGR and results are compared with conventional diesel fuel operation (DI @ 23 deg bTDC and 200 bar injection pressure). From the experimental results, it is found that, the ignition delay is reduced considerably for diesel vapour induction due to better mixture preparation and results in low emissions. A reduction of about 55% and 80% in NOx emissions and 20% and 30% reduction in smoke emissions are obtained for diesel vapour induction without EGR and Diesel vapour induction with 10% EGR compared to conventional mode of operation. © 2008 Elsevier Ltd. All rights reserved.