The effects of ambient pressure and coolant temperature on the performance and combustion characteristics of diesel engine were studied on the engine test bed of simulating high altitude (low pressure). The results indicate that the maximum combustion pressure decreases, the incylinder temperature increases greatly, the ignition timing delays and the combustion duration extends accompanied with severe post combustion, and the power and economy performance declines obviously because the combustion heat cannot release in time. With the increase of coolant temperature, the maximum combustion pressure increases, the ignition timing advances, the combustion duration extends slightly, the combustion center shifts forward and the heat release rate decreases. Moreover, the influence of coolant temperature on combustion is more obvious especially at low air pressure. Under the high altitude (low pressure) condition, increasing coolant temperature can reduce the heat release of coolant and increase the heatwork conversion efficiency, and the plateau power and economy performance of diesel engine improve greatly meanwhile without a high thermal load.