Alternative fuels are gaining importance as a means of reducing petroleum dependence and green house gas emissions. Biodiesel is an attractive renewable fuel; however, it typically results in increased emissions of nitrogen oxides (NOx) relative to petroleum diesel. In order to develop hypotheses for the cause of increased NOx emissions during diffusion-dominated combustion in a modern diesel engine, an effort incorporating both experimental and modeling tasks was conducted. Experiments using a 2007 Cummins diesel engine showed NOx and fuel consumption increases of up to 38% and 13%, respectively, and torque decreases up to 12% for soy-biodiesel. Fuel properties and ignition delay characteristics were implemented in it previously validated engine model to reflect soy-biodiesel. Model predictions are within 3.5%, 7%, and 9.5%, respectively, of experimental engine gas exchange (airflow, charge flow, and exhaust gas recirculation (EGR) fraction), performance (work Output, torque, and fuel consumption), and NOx emission measurements. The experimental and model results for the diffusion combustion-dominated operating conditions considered here suggest that higher biodiesel distillation temperatures and fuel-bound oxygen lead to near stoichiometric equivalence ratios in the rich, premixed portion of the flame as well as higher combustible oxygen mass fractions in the diffusion flame front which together result in increased biodiesel combustion temperatures and NOx formation rates.