This article presents a new on-line dimethyl ether/diesel mixing method, researches its blend characteristics, and also validates combustion and emission effects on a light-duty direct injection engine. This new blend concept is that dimethyl ether is injected into the fuel pipeline to mix with local diesel as the injector stops injection, and this mixing method has some advantages, such as utilization of the original fuel system to mix dimethyl ether with diesel intensively, flexibility on adjustable mixing ratio varying with the engine operating condition, and so on. A device was designed to separate dimethyl ether from the blends, and its mixing ratios and injection quantity per cycle were also measured on a fuel pump bench. The results show that compared with the injected diesel, the... percentages of dimethyl ether injected into fuel pipeline are 13.04, 9.74, 8.55, and 7.82% by mass as the fuel pump speeds increase, while dimethyl ether injected into fuel pipeline are 45.46, 35.53, 31.45, and 28.29% of wasting dimethyl ether. The power outputs of engine fueled with the blends are slight higher than those of neat diesel at low speeds, while at high speeds, its power outputs are a little lower. Smoke emissions of the blends are lower about 30% than that of neat diesel fuel at medium and high loads with hardly any penalty on smoke and NOx emissions at light loads. The NOx and HC emissions of the blends are slight lower than that of neat diesel fuel at all loads.