Relying on the advantages of small size, simple structure, low cost and weight, air-cooled two-cylinder turbocharged diesel engines have been widely used in generator sets. However, there is still a lack of systematic study on the combustion characteristics of small air-cooled diesel engines. This paper presented a quantitative study on the combustion performance of a non-road air-cooled two-cylinder turbocharged diesel engine by both simulation and experiment. The results show that the increase of intake air temperature can delay the combustion center of gravity, and improve the combustion performance and the sustainability of diesel engines. The decrease of intake air pressure will lead to a reduction in oxygen amount during the combustion process, thus causing a deterioration of cylinder pressure and combustion performance. By modifying the combustion chamber, the ignition delay and combustion duration are each extended by 1.6 degrees and 4.2 degrees under 100% engine load. The ignition delay and combustion duration are not obviously affected by modifying the combustion chamber shape under 25% and 50% loads. By increasing the compression ratio from 19.5 to 20.5, the ignition delay and combustion duration are shortened, which could enhance the cylinder pressure and heat release rate. However, reducing the compression ratio from 19.5 to 18.5 could significantly decrease the heat release rate. Under middle and low loads, combustion duration is less affected by injection timing. Under 100% load, the peak cylinder pressure increases to 11.4 MPa, and the ignition delay is shortened by advancing injection timing from -17°CA to -20°CA. The findings of this study have the potential to offer new insights for promoting the sustainable development of diesel engines used in generator sets.