The objective of this study is to investigate the effect of CO2 mole fraction by simulated‐exhaust gas recirculation (EGR) on the simultaneous reduction of exhaust emission in CI engine, and to find the optimal operating conditions.For the better expression of the actual EGR, the different CO2 mole fractions from 0% to 20% were applied for the simulated‐EGR. The CO2 mole fraction by simulated‐EGR was changed in the initial air in steps of 5% from 0% to 20% in the cylinder. The N2 mole fraction in the initial air was also changed according to the CO2 mole fraction, and the O2 mole fraction was fixed by 16.2% due to the same overall equivalence ratio.When the CO2 mole fraction by simulated‐EGR increased by 5%, the peak cylinder pressure was decreased by about −1.5% and the indicated specific nitrogen oxide value was also reduced from −4.9% to −48.8% because the ignition delay was longer by the higher specific heat of CO2 than N2, it induced to suppress the rise of cylinder temperature. In addition, when the start of energizing timing was advanced until BTDC 23 deg, the ISSoot value was decreased because the proportion of premixed combustion was increased.