Internal combustion engines are the backbone of contemporary global transportation. But the major drawbacks associated with them, are the exhaust gases. These include carbon monoxide (CO), unburned hydrocarbons (UBHC), oxides of nitrogen (NOx), odor, particulate matter (PM) etc. Among them the emissions of oxides of nitrogen (NOx) and the particulate matter are the reasons of serious concern. For NOx reduction in recent developing technologies, diesel water emulsion was found the best approach for the existing engines by researchers. In the present study, performance and emission statistics of a diesel engine using diesel water emulsion operating at different compression ratios from 17: 1 to 18: 1 was performed. Stable Emulsions were prepared with 5%, 10%, 15%, 20% and 25%(v/v) water concentration with variable agitation speed ranging from 5000-15000 rpm along with two surfactants. Various physico-chemical properties of emulsions were tested for all six samples including diesel. Exhaustive experiments were conducted on a single cylinder, water cooled, variable compression ratio (VCR) diesel engine with all test fuel samples and the results obtained were compared with neat diesel operation for respective compression ratios. A reduction in NOx is observed by increasing the water concentration in the test fuels at all loads due to reduction in adiabatic flame temperature inside engine cylinder. However, this pattern was not uniform across the range of compression ratios ie 17: 1 and 18: 1 considered in the present investigation. It was found that with higher compression ratio there is a steep decline of NOx emission with the addition of water, which is achieved at cost of reduced brake thermal efficiency.