Biodiesel has attractive fuel properties such as excellent biodegradability and lubricity, almost no emissions of sulfur oxides, PAH and n-PAH, reduced CO 2 , PM and CO emission, superior combustion efficiency, etc. However, burning of biodiesel generally produces higher levels of NO x emissions, primarily due to its high oxygen content. In this study, the emulsification technology has been considered to reduce the NO x emission level of fossil fuel. Biodiesel, produced by means of transesterification reaction accompanied with a peroxidation process, was emulsified to form two-phase W/O and three-phase O/W/O emulsions. The effects of the emulsification variables such as hydrophilic lipophilic balance (HLB), and water content on the fuel properties and emulsion characteristics of W/O and O/W/O emulsions were investigated in this study. The experimental results show that the surfactant mixture with HLB=13 produced the highest emulsification stability while HLB=6 produced the lowest emulsification stability and the most significant extent of water–oil separation among the various HLB values for O/W/O biodiesel emulsion. The kinematic viscosity, specific gravity and carbon residual of the biodiesel emulsions were larger than those of the neat biodiesel. In addition, the W/O biodiesel emulsion was found to have a smaller mean droplet size, lower volumetric fraction of the dispersed phase than the O/W/O biodiesel emulsion, and the highest heating value among the test fuels, if the water content is deducted from the calculation of the heating value.