The present work examines the effects of oxygen addition on diesel combustion parameters and pollutant emissions. Oxygen is added either by increasing the partial pressure of oxygen in the intake air or by oxygenating the fuel. This is a predominately computational study, where the effect of oxygen addition is addressed using a two-dimensional multi-zone model. The validity of model calculations was assessed against pertinent experimental data generated in this laboratory from a single cylinder DI diesel engine using neat diesel oil and oxygenated fuels. The comparison of the two techniques was conducted at comparable oxygen mole fractions (21–22.5%) in the fuel–air mixture (charge) of the combustion chamber. For all cases, engine torque was retained the same by adjusting fuelling rate. At fixed engine load, in-cylinder pressure, temperature, soot and NO concentration histories, which were calculated for a conventional diesel fuel, are compared with corresponding data, which were derived using either oxygenated fuels or oxygen-enhanced air. Results showed that both techniques produce an increase of cylinder pressure and reduction of soot compared to the normal diesel operation, with the fuel oxygenation being the most effective. However, both techniques increase NO x emissions, with the fuel oxygenation being more detrimental. Fuel-side oxygenation gave higher soot reductions for a given NO increase compared to air-side oxygen-enhancement. The higher sensitivity of soot reduction and NO x deterioration to fuel-side oxygen-addition is attributed to higher oxygen availability inside each combustion zone. Model computations revealed “linearity” between engine out pollutant emissions and oxygen content of the intake air. To the contrary, “non-linearity” was evident between emissions and oxygen content in oxygenated fuels. This indicates that engine performance characteristics and pollutant emissions are easier to predict when enriching the air rather than the fuel with oxygen, since in the latter case changes in performance and emissions are attributed not only to fuel oxygen content but also to fuel molecular structure and properties.