Introducing water with fuel in diesel engines has been proved to be powerful and economical method for reducing combustion pollutant emissions from the engine. Most studies available in literature discuss the effect of adding water to the fuel in the range 5 to 10% water. In this paper, results of modeling study are presented where the effect of relatively high water content in fuel has been investigated. The fuel used was a surrogate mixture composed of 70% n-Heptane and 30% Toluene with two water contents of 25% and 35% by volume. The modeling study was performed using the commercially available software CHEMKIN at diesel engine-relevant conditions. The results show that water, even at high percentages, still has the tendency to reduce pollutant emissions as its concentration increases. Also, fuel consumption was found to decrease by increasing water content. However, the tradeoff with CO and Unburned Hydrocarbons UHC emissions was maintained.