This paper discusses the results obtained from experiments conducted on a large-bore diesel engine when oxygen-enriched combustion air is used. An operating regime was identified in which particulates and NOx could be reduced simultaneously when the concentration of intake air oxygen, fueling rate, and injection timing were optimized. Additional benefits such as higher gross power, lower peak cylinder pressures, and lower brake-specific fuel consumption were also observed under these optimized operating parameters. With an optimal operating strategy (oxygen concentration, fueling rate, and timing), particulates were reduced by approximately 60% and NOx emissions were reduced by 15–20%. Gross power was increased by about 15–20% at base peak combustion pressure, and brake-specific fuel consumption was decreased by 2–10% with load. These results were obtained on a two-cylinder (EMD 567B) locomotive research diesel engine using oxygen from an external source. To utilize this technique in practice, an air separation membrane and associated auxiliary equipment could be connected to the engine’s intake air system (after the air filter) to supply the desired oxygen-enriched combustion air; this additional evaluation is beyond the scope of current study. Although operating the membrane causes a parasitic power drain, the increase in gross power could compensate for these losses, resulting in a potential net gain in power and lower emissions for diesel engines.