An experiment was carried out for Exhaust gas recirculation system to understand the effect of EGR rate and temperature on engine performance and emission. An EGR system was used in single cylinder, 4-stroke diesel engine. This experiment was conducted using three different rates and three different temperatures from a range. As we know that the diesel engines are known for their high NOX formation, this experiment is conducted to see the potential of EGR rate and EGR temperature. EGR method is a very useful in reducing the NOX formation. But it also affects brake thermal efficiency and Bsfc of engine performance. Emitted exhaust gas is recirculated in engine intake. Three different rates; 5%, 10% and 15% of this exhaust gas was recirculated in engine to check the effect of EGR rate on different loading conditions. Then on existing setup three temperatures were selected to check the effect of temperatures on different loading conditions and EGR rates. These experiment results prove that the EGR rate has higher potential for reducing the NOX formation than the EGR temperature in diesel engines. It also produces a little penalty in HC emissions.