In this study, the energy and exergy analysis has been carried out by applying first law and second law of thermodynamics on a single cylinder conventional diesel engine at various compression ratios. The desired compression ratios were attained by changing the clearance volume. The test results indicated that the heat carried away by exhaust gases was 10% at compression ratio of 15.37:1. The unaccounted loss was more, 41.6% at a compression ratio of 14.5:1. The heat carried away by cooling water was 24% at compression ratio of 16.4:1. The energy analysis shows that the availability of brake power at compression ratio of 17.5:1 is 27%. The destructive availability is 57% at compression ratio of 13.7:1.