Alternative fuel engines have widely been developed in the world due to the decrease of oil resources and the strictness of exhaust regulation. This paper introduces the main processes of designing the diesel engine fuelled with coal-bed gas and ignited by spark plug, and analyzes a number of problems considered in processes of designing the engine. As an example, the characteristics of a coal-bed gas engine converted from a S195 diesel engine are introduced, and the performances of the prototype engine are discussed based on the results of engine testing. And some significant conclusions were got.