There is an increased interest in many countries to search for suitable alternative fuels which are environmental friendly. Vegetable oils and their methyl esters are found to be good alternative renewable fuels for compression ignition engines. The major problem associated with the direct use of vegetable oils is their high viscosity and low volatility. The best possible method to reduce viscosity is transesterification which produces esters of respective oils. This work presents the results of investigations carried out in studying the properties of mahua methyl ester and its blends with diesel fuel from 20% to 100% by volume and running a diesel engine with these fuels. The engine tests have been carried out to determine the performance and emissions and to compute the behavior of diesel engine running with above mentioned fuels. The B-20 blend substantially reduces the emission level with acceptable efficiency. The properties of methyl ester of mahua oil are comparable with conventional diesel. Further, the tests have been carried out at a constant speed of 1500rpm at different brake power at three different injection pressures. The results show that mahua methyl ester blend (B-20) performs well in running a diesel engine at 200bar injection pressure which is higher than rated injection pressure of diesel engine which is 180bar. Based on this study the methyl ester of mahua oil can be used as a suitable additive with diesel in compression ignition engine.