Abstract: Biomass pyrolysis oil (BPO) produced through biomass fast pyrolysis process is mainly composed of oxygenated organics and water, thereby restricting its direct use as fuel is essential. However, the use of BPO in diesel engines can be realized by developing emulsions from BPO and diesel fuel. In this paper, the emulsion with 10 wt % BPO in No.0 diesel, represented by BPO10, was produced by using ultrasonic emulsification method after determining the optimum hydrophilic and lipophilic balance (HLB) value of the emulsifier for the emulsions from BPO and diesel. Then, the combustion and emission characteristics of an unmodified direct injection diesel engine operating on BPO10 were studied and compared with those of No.0 diesel operation. The results show that the optimum HLB value of the emulsifier for the emulsions from BPO and diesel is about 5.8. The engine operating on BPO10 exhibits a later combustion start point, displays a higher peak value of premixed burning rate and a slightly lower peak value of diffusion burning rate, and has a lower peak combustion pressure and a shorter combustion duration when compared with No.0 diesel. In addition, the brake specific fuel consumption is higher and the effective thermal efficiency is comparable for BPO10 operation. NOx and smoke emissions with BPO10 were reduced significantly, while HC and CO emissions were increased when compared with those of No.0 diesel operation.