The increase in number of automobiles in recent years has resulted in great demand for petroleum products. Vegetable oils might provide a viable alternative to diesel since they are renewable in nature and environmentally friendly. In the present investigation biodiesel was prepared from pungamia oil and blended with diesel. The prepared biodiesel blend of 20% was used for the present investigation. Tests were conducted in a single cylinder direct injection diesel engine fueled with 20% biodiesel blend for compression ratios of 19:1, 17:5 and 16:1,Injection timings of 27 °bTDC, 24°bTDC and 21°bTDC and Injection pressures of 240bar, 220bar and 200bar. From the detailed analysis of performance and emission characteristics, the optimized operating parameters such as compression ratio of 19:1, Injection timing of 27°bTDC and Injection pressure of 240 bar are identified for the diesel engine fueled with 20% biodiesel blend. For these optimized operating parameters ,highest brake thermal efficiency of (30.9%), lowest brake specific energy consumption of (11005 kJ / kW-hr) were observed .The heat release rate and harmful pollutants such as HC, CO are reduced in the 20% biodiesel blend compared to diesel fuel .At these optimized operating parameters emission of nitric oxide increases marginally for 20%biodiesel blend compared to diesel fuel .Finally it can be concluded that 20% biodiesel blend could be used as alternative fuel for optimized operating CI engine at compression ratio of 19:1, injection pressure of 240 bar and injection timing of 27ºbTDC for better engine performance and lower emissions. The results reveal that the pungamia biodiesel blend can be used safely without any modification to the engine.