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In this paper, a novel biodiesel-like fuel, ethylene glycol monoethyl ether palm oil monoester was synthesized with ethylene glycol monoethyl ether and palm oil as reagents and KOH as catalyst. Transesterification reaction was conducted to approach the optimal preparation conditions. Its chemical structure was identified through analyses of FT-IR, 1H-NMR and GPC analyses. A double cylinders, 4-stroke, water-cooled, DI diesel engine was adopted to accomplish determination of power output and exhaust emissions. The results showed that Smoke, NOx, HC and CO emissions were significantly reduced in contrast with diesel fuel. The new biodiesel-like fuel also exhibited less ignition delay and shorter combustion duration than diesel fuel.