Stringent emission regulations and depletion of crude oil are driving researchers toward alternative fuels. In this context, palm oil emerges as a good competitor as it is highly economical compared to other alternative fuels. The current research work centers around the impact of palm oil methyl ester on performance, combustion, and emission characteristics at varying injection timings and exhaust gas recirculation rates. In the first phase of this research work, various blends of palm oil methyl ester with diesel with volume concentrations of 10, 20, and 30% were prepared and tested at different load conditions. Injection timing was then varied for the optimized blend. In the second phase, the impact of exhaust gas blending with fresh charge was studied at optimized injection timing. The test outcomes revealed that 20% mix of palm oil at 27° bTDC with exhaust gas blending of 20% generated higher brake thermal efficiency, higher peak pressure, and less hydrocarbon and nitrogen oxide emissions compared to diesel at standard injection timing of 23° bTDC and no blending of exhaust gases with fresh charge. However, progression of injection timing with 20% exhaust gas mixing indicated a slight penalty in smoke discharges. Brake thermal efficiency at advanced injection timing with 20% mix of exhaust gases reduced by 7.7% for diesel and increased by 6.5% for 20% blend of palm oil when compared to standard injection timing of diesel and no blending of exhaust gases. Significant diminishments in oxides of nitrogen (lessened by 6.6%) and hydrocarbons (decreased by 30.43%) have been noted for 20% mix of biodiesel at advanced injection timing with 20% exhaust gas mix contrasted to diesel at standard conditions. Therefore, the present examination prescribes 20% merging of exhaust gases for 20% blend of palm oil with advancement of injection timing for diesel engine applications.