Stock engine design and decision making target optimal performance with conventional diesel fuel, leading to suboptimal results for biodiesel. The main result of this study is the determination of the appropriate engine decision making for the air/fuel ratio (AFR), exhaust gas recirculation (EGR) fraction, injection (rail) pressure, and start of main fuel injection (SOI) in a modern common rail diesel engine using variablegeometry turbo charging and operating with 5% (B5) and 20% (B20) soy-based biodiesel fuel mixtures to minimize brake-specific fuel consumption (BSFC) while adhering to strict combustion noise, NO x and PM emission constraints. In so doing, this effort determined to what extent the optimal AFR, EGR fraction, rail pressure, and SOI settings can (1) overcome the well-known "biodiesel-NO x effect" and (2) mitigate the impact of lower biodiesel energy density on BSFC for B5 and B20 biodiesel blends. Study findings indicate that lower AFR, higher EGR fraction, and earlier start of main injection can completely eliminate biodiesel NO x increases with blends of soy-based biodiesel in a modern diesel engine. While the BSNO x reductions were achieved with acceptable BSPM and noise, it was not possible to reduce the BSFC for B5 and B20 to conventional diesel levels.