The use of natural gas in compression ignition (CI) engines as a supplement to diesel under dual-fuel combustion mode is a promising technique to increase efficiency and reduce emissions. In this study, the effect of dual-fuel operating mode on combustion characteristics, engine performance and pollutant emissions of a diesel engine using natural gas as primary fuel and neat diesel as pilot fuel, has been examined. Natural gas (99% methane) was port injected into an AVL 5402 single cylinder diesel research engine under various engine operating conditions and up to 90% substitution was achieved. In addition, neat diesel was also tested as a baseline for comparison. The experiments were conducted at three different speeds—1200, 1500, and 2000 rpm, and at different diesel-equivalent loads (injection quantity)—15, 20 (7 bar IMEP), and 25 mg/cycle. Both performance and emissions data are presented and discussed. The performance was evaluated through measurements of in-cylinder pressure, power output and various exhaust emissions including unburned hydrocarbons (UHCs), carbon monoxide (CO), nitrogen oxides (NOx), and soot. The goal of these experiments was to maximize the efficiency. This was done as follows—the compressed natural gas (CNG) substitution rate (based on energy) was increased from 30% to 90% at fixed engine conditions, to identify the optimum CNG substitution rate. Then using that rate, a main injection timing sweep was performed. Under these optimized conditions, combustion behavior was also compared between single, double, and triple injections. Finally, a load and speed sweep at the optimum CNG rate and timings were performed. It was found that a 70% CNG substitution provided the highest indicated thermal efficiency (ITE). It appears that dual-fuel combustion has a maximum brake torque (MBT) diesel injection timing for different conditions which provides the highest torque. Based on multiple diesel injection tests, it was found that the conditions that favor pure diesel combustion, also favor dual-fuel combustion because better diesel combustion provides better ignition and combustion for the CNG-air mixture. For 70% CNG dual-fuel combustion, multiple diesel injections showed an increase in the efficiency. Based on the experiments conducted, diesel-CNG dual-fuel combustion is able to achieve similar efficiency and reduced emissions relative to pure diesel combustion. As such, CNG can be effectively used to substitute for diesel fuel in CI engines.