In this study the effect of varying the behavior of 457-LA diesel engine cooling system has been conducted using research facilities installed on a test bed with W400 eddy current dynamometer. Insufficient information on the engine thermal regime has resulted in the wrong belief that the engine performance and life can be extended by reducing the temperature of the circulating cooling water. Theoretical studies and the experimental results of the present study show that for an engine under loading condition, any variation in the cooling system, particularly, reducing the cooling water temperature, increases the mechanical stresses due to change in allowable tolerances. Other consequences, such as increased fuel consumption and pollution, result in after burning and thermal stresses and corrosion in the exhaust system. At the same time, meaningful reduction in measured power and torque has been observed for the case of reduced cooling water temperature. In contrast, increase in the cooling water temperature limit, using standard and optimized diesel fuel, can result in superior characteristics for power, torque, fuel consumption and pollution.