A multi-dimensional computational fluid dynamics (CFD) modeling was conducted on a D.I. (Direct Injection) diesel engine fueled by bio-diesel based on KIVA4 code. Comprehensive chemistry prediction of bio-diesel fuel was taken into account by enhancing the combustion model of the default KIVA4 code. An advanced multi-component fuel combustion model was applied to accurately predict the oxidation of saturated and unsaturated agents of the bio-diesel fuel using a reduced chemical kinetics mechanism. In order to accurately model spray, atomization and evaporation of the bio-diesel fuel, detailed thermophysical properties of fuel components were predicted and tabulated in the fuel routine of the KIVA4 code. After the validation for cylinder pressure and heat release rate at engine mid load with experimental engine tests, further numerical studies were performed to investigate effects of injection strategies such as double and triple injection pulses and axial location of injector nozzle. It has been found that cylinder peak pressure was increased by applying double and triple injections and some enhancements on output power was also observed. Moreover, it was found that nozzle axial location has considerable effect on combustion of the bio-diesel fuel where wall impingement of the liquid bio-diesel fuel resulted in lower evaporation and higher unburnt hydro carbon (UHC) emission.