To achieve emission standard norms and higher fuel efficiency conversion are the main concerns in diesel engines. The single parametric study approach might not attain the optimal combustion characteristics. In order to overcome this issue, multi objective study has been carried out to achieve the higher performance and simultaneously reduction of emissions. The main objective of present article is identifying the optimum set of the engine parameters for diesel fuel, which gives better performance and emissions. Numerical analysis was carried out by using CONVERGE CFD software. Numerical analysis were carried out by varying the Compression Ratio (CR) (12–16.5), Start of Injection (SOI) (0–25° bTDC), Fuel Injection Pressure (FIP) (500–1,400), and Exhaust Gas Recirculation (EGR) (0–40%). Response surface methodology was used for optimization. The parameters are optimized for minimizing the NOx, soot, and ISFC by using the Response Surface Methodology (RSM). Regression equations were developed for the responses such as ISFC, NOx, and soot. It was observed that the interaction effects also play a major role in determining the performance and emission characteristics of the engine. The optimum combination of operating parameters was found to be CR 14.55, SOI 16.29° bTDC, FIP 855 bar, and EGR 26.15% with a composite desirability of 0.94. The corresponding NOx and soot emissions are reduced by 40.3% and 52.38%, respectively, and a marginal reduction in the ISFC is accomplished. Mixture homogeneity (TFDI) was improved 27% for optimum case compared to baseline configuration.