The effects of compression ratio and simulated exhaust-gas recirculation (EGR) on combustion characteristics and exhaust emissions of a diesel PCCI engine were investigated using a single-cylinder test engine. Tests were carried out under constant speed with various compression ratios and EGR rates. Exhaust emissions and in-cylinder pressure were measured for all experimental conditions. Analyses based on engine performance and exhaust emissions were conducted. An optimum compression ratio that provided better indicated thermal efficiency and IMEP while yielding lower emissions of smoke, HC, and CO, and reasonable NO x without EGR was identified. High rates of EGR led to the simultaneous reduction of NO x and soot emissions due to a lower combustion temperature compared with conventional diesel combustion, with a slight penalty in HC and CO.