Water in diesel emulsion (WiDE) is a viable solution for lowering both NOx and Soot emissions from compression ignition (CI) engines. In this paper, the effect of WiDE on the combustion process and exhaust emissions of a prototype optically accessible CI engine was investigated through conventional in-cylinder pressure measurements and optical diagnostics. The emulsion (9.1%v of water) was produced through a prototype designed microchannels emulsifier with a small amount of nonionic surfactant. Commercial diesel was set as reference fuel and compared to WiDE. The start of injection (SOI) was swept from 8 to 23 CAD BTDC. For diesel fuel, the injected mass and injection pressure were representative of a medium load regime, WiDE injection interval was adjusted to keep constant the energy content. Compared to Diesel, WiDE induced an increase in ignition time, enhancing the air/fuel mixing with a simultaneous reduction in PM and NOx. 2D chemiluminescent emission measurements highlighted a reduction in soot formation using WiDE, without significant changes in soot oxidation rate.