DME has been considered an alternative fuel to diesel fuel with promising benefits because of its high reactivity and volatility. Research shows that an engine fueled with DME will produce zero smoke emissions. However, the storage and the handling of the fuel are underlying difficulties owing to its high vapour pressure (530 kPa @ 20 °C). In lieu, OME1 fuel, a derivate of DME, offers advantages exhibited with DME fuel, all the while being a liquid fuel for engine application. In this work, engine tests are performed to realize the combustion behaviour of DME and OME1 fuel on a single-cylinder research engine with a compression ratio of 9.2:1. The dilution ratio of the mixture is progressively increased in two manners, allowing more air in the cylinder and applying exhaust gas recirculation (EGR). The high reactivity of DME suits the capability to be used in compression ignition combustion whereas OME1 must be supplied with a supplemental spark to initiate the combustion. The results indicate that a low-temperature heat release (LTHR) is present during the combustion of DME fuel. Increasing the excess-air ratio is observed to have little effect on the LTHR phasing while increasing the heat released during combustion. Increasing the EGR levels significantly suppress the in-cylinder pressure rise rates of both fuels, and retard the combustion phasing.