In the context of fast depletion of fossil fuels, increase of pollution levels with fossils and increase of economic burden due to increase of import cost of crude petroleum, the search for alternative fuels has become pertinent. The most common alternative fuels for CI engine are vegetable oils, biodiesel and alcohols. Gaseous fuels have many advantages than liquid fuels, as the pollutants emitted by gaseous fuels are low, calorific value of the gases is very high and running and maintenance cost is low. The drawbacks associated with vegetable oils such as high viscosity and low volatility can be rectified to some extend by converting them into biodiesel. How they (biodiesel) cause combustion problems in diesel engine and hence call for low heat rejection (LHR) engine, which can burn low calorific value fuel, give high heat release rate and faster rate of combustion. Investigations were carried out with CNG as primary fuel inducted by port injection and cottonseed biodiesel blended with 15% of diethyl ether (DEE) was injected into the engine in conventional manner with LHR engine consisted of ceramic coated cylinder head. The purpose of DEE was to improve cetane (a measure of combustion quality in diesel engine) and to reduce viscosity of the cotton seed biodiesel. Particulate matter (PM), oxides of nitrogen (NOx), carbon mono oxide (CO) levels and un-burnt hydro carbons (UBHC) are the exhaust emissions from a diesel engine. They cause health hazards, once they are inhaled in. They also cause environmental effects like Green-house effect, acid raining, Global Warming etc,. Hence control of these emissions is an immediate effect and an urgent step. The pollutants of PM, NOx, CO and UBHC were determined at full load operation of the engine and compared with diesel operation on conventional engine. The maximum induction of CNG was 35% of total mass of biodiesel, with CE, while it was 45% with LHR engine at full load operation. Particulate emissions were determined by AVL Smoke meter, while other emissions were measured by Netel Chromatograph multi-gas analyzer at full load operation. The optimum injection timing with cottonseed biodiesel was 31obTDC (before top dead centre), with CE, while it was 28obTDC with LHR engine. These pollutants were drastically reduced with induction of CNG and further reduced with the provision of LHR engine. They were further reduced with advanced injection timing and increase of injection pressure.