The objectives of the study are to reveal the influence of multistage fuel-oxidation chemistry, thermal radiation of soot during the combustion of a small (submillimeter size) fuel droplet, and real gas effects on the operation process of compression ignition engines. The use of the multistage oxidation chemistry of iso-octane in the zero-dimensional approximation reveals the appearance of different combinations of cool, blue, and hot flames at different compression ratios and provides a kinetic interpretation of these phenomena that affect the heat release function. Cool flames are caused by the decomposition of alkyl hydroperoxide, during which a very reactive radical, OH, is formed. Blue flames are caused by the decomposition of H2O2 with the formation of OH. Hot flames are caused by the chain branching reaction between atomic hydrogen and molecular oxygen with the formation of OH and O. So-called “double” cool flames correspond to the sequential appearance of a separated cool flame and a low-intensity blue flame rather than two successive cool flames. The use of a one-dimensional model of fuel droplet heating, evaporation, autoignition, and combustion at temperatures and pressures relevant to compression ignition engines shows that the thermal radiation of soot during the combustion of small (submillimeter size) droplets is insignificant and can be neglected. The use of real gas caloric and thermal equations of state of the matter in a three-dimensional simulation of the operation process in a diesel engine demonstrates the significant effect of real gas properties on the engine pressure diagram and on the NO and soot emissions: real gas effects reduce the maximum pressure and mass-averaged temperature in the combustion chamber by about 6 and 9%, respectively, increases the autoignition delay time by a 1.6 crank angle degree, increase the maximum heat release rate by 20%, and reduce the yields of NO and soot by a factor of 2 and 4, respectively.