Biodiesel can be used easily as an alternative fuel in diesel engines and is environmentally friendly. With increased global fossil fuel price, biodiesel is economically competitive, because, triglycerides and its derivatives are obtained from plant oil (edible, nonedible) or fats. In this research work, the possible application of biodiesel obtained from sunflower oil in a low speed diesel engine (M8/l Lister) was investigated. Performance parameters and exhaust engine pollutants in diesel and biodiesel compound on a volume basis (B00, B10, B20, B30, B40, B100) was studied.The results of the engine short time tests on the basis of ECE-R49 standard showed that by increasing biodiesel percentage up to 20 volume, same properties such as pressure peak in combustion chamber, exhaust engine temperature, ignition delay, engine speed, brake and indicatory efficiency are increased in order to improve engine efficiency. Also, due to combustion quality improvement, CO and UHC emissions are decreased, but NOx increased through higher combustion temperature and consequently higher pressure. Brake specific fuel consumption is minimum in compound, which is economically very important.