Compression ratio has very important influence on fuel economy, emission, and other performances of internal combustion engines. Application of variable compression ratio in diesel engines has a number of benefits, such as limiting maximal in cylinder pressure and extended field of the optimal operating regime to the prime requirements: consumption, power, emission, noise, and multifuel capability. The manuscript presents also the patented mechanism for automatic change engine compression ratio with twopiece connecting rod. Beside experimental research, modeling of combustion process of diesel engine with direct injection has been performed. The basic problem, selection of the parameters in double Vibe function used for modeling the diesel engine combustion process, also performed for different compression ratio values. The optimal compression ratio value was defined regarding minimal fuel consumption and exhaust emission. For this purpose the test bench in the Laboratory for Engines of the Faculty of Engineering, University of Kragujevac, is brought into operation.