Dual fuel natural gas engines have been studied for the purpose of near future engine. This study focuses on the effect of early injection of light oil and exhaust gas recirculation (EGR) fueled with methane from an inlet pipe on characteristics of combustion and exhaust emissions. The injection timing was changed from TDC to 50 degrees before the TDC. In the early injection timing, smoke was never seen and hydrocarbons were smaller compared with those at the normal injection timing. However, the combustion becomes too early to obtain an appropriate torque when the equivalence ratio increases. Then, moderate nitrogen dilution was very effective to retard the combustion with lower NOx, higher thermal efficiency and almost the same hydrocarbons and carbon monoxide. And it was found that the engine operates even under the condition of stoichiometric mixture.