Biodiesel is an alternative fuel for diesel engine that can be produced by chemically reacting a vegetable oils, waste cooking oils, and animal fats with an alcohol to form alkyl esters. It is an oxygenated, sulfur-free, non-toxic, biodegradable, and renewable fuel with a higher cetan number and lubricity and can be used as pure or blends without any significant modification in diesel engines. In this study, the effects of using soybean oil methyl ester as a fuel in a direct injected diesel engine on the performance and exhaust emissions were investigated experimentally. Experimental study was performed using diesel fuel no. 2 and soybean oil methyl ester at full load and engine speeds ranging from 1200 to 2400 rpm. The results showed that the biodiesel produced lower effective power and higher specific fuel consumption than diesel fuel due to lower heating value of soybean oil methyl ester. In addition, CO, HC, NOx and smoke emissions from biodiesel were lower than that of diesel fuel no.2.