In recent years, dimethyl ether (DME) has received attention as an alternative to diesel fuel. This is because, firstly, DME has a cetane number close to that of diesel fuel, secondly, an innovative chemical process has been developed for much production of DME efficiently from natural gas, and, thirdly, DME is an oxygenate fuel having a molecular C-O bond characteristic of smoke-free fuel. Therefore, DME would be expected to be a less pollutant-forming fuel alternative to diesel fuel. However, even when using DME, nitrogen oxides (NO x) still remain problems under stringent exhaust gas emission regulations. In this study, an NO x storage reduction (NSR) system was evaluated using the DME engine with a common-rail injection system. Rich conditions are created by injecting DME fuel into the catalyst. Stationary NO x reduction tests have been performed with various exhaust gas recirculation (EGR) rates from low-load to full-load conditions. In the DME engine, high injection pressures using multi-hole injectors are effective for enhancing combustion. The power output of the DME engine using a high pressure of 30 MPa with a common-rail injection system is almost identical with that of a diesel engine. In the NO x reduction system, it was possible to obtain a high reduction rate of NO x emissions from the DME engine by applying the NSR catalyst. However, the temperature at the catalyst inlet must exceed 350°C to obtain a reduction rate higher than 80 per cent. Moreover, it was possible to reduce the amount of DME injection in the NSR system by applying the EGR because of decreased NO x emission.