Water-emulsified diesel has proven itself as a technically sufficient improvement fuel to improve diesel engine fuel combustion emissions and engine performance. However, it has seldom been used in light-duty diesel engines. Therefore, this paper focuses on an investigation into the thermal efficiency and pollution emission analysis of a light-duty diesel engine generator fueled with different water content emulsified diesel fuels (WD, including WD-0, WD-5, WD-10, and WD-15). In this study, nitric oxide, carbon monoxide, hydrocarbons, and carbon dioxide were analyzed by a vehicle emission gas analyzer and the particle size and number concentration were measured by an electrical low-pressure impactor. In addition, engine loading and fuel consumption were also measured to calculate the thermal efficiency. Measurement results suggested that water-emulsified diesel was useful to improve the thermal efficiency and the exhaust emission of a diesel engine. Obviously, the thermal efficiency was increased about 1.2 to 19.9%. In addition, water-emulsified diesel leads to a significant reduction of nitric oxide emission (less by about 18.3 to 45.4%). However the particle number concentration emission might be increased if the loading of the generator becomes lower than or equal to 1800 W. In addition, exhaust particle size distributions were shifted toward larger particles at high loading. The consequence of this research proposed that the water-emulsified diesel was useful to improve the engine performance and some of exhaust emissions, especially the NO emission reduction. Implications: The accumulated test results provide a good basis to resolve the corresponding pollutants emitted from a light-duty diesel engine generator. By measuring and analyzing transforms of exhaust pollutant from this engine generator, the effects of water-emulsified diesel fuel and loading on emission characteristics might be more clear. Understanding reduction of pollutant emissions during the use of water-emulsified diesel helps improve the effectiveness of the testing program. The analyzed consequences provide useful information to the government for setting policies to curb pollutant emissions from a light-duty diesel engine generator more effectively.