A diesel engine includes a cylinder head, a cylinder sleeve, a piston, an injector, and a combustion chamber. The top side of the piston includes an annular top surface, an annular collision belt and an annular cavity. The collision belt includes a collision surface, an upper guide surface, and a lower guide surface. An annular throat is formed between the upper guide surface and the cylinder head. The collision belt divides the combustion chamber into a headspace and a central portion. The volume of the headspace is more than three times of the volume of the central portion. A major portion of the fuel jet injected by the injector is directed into the headspace. The results are faster mixing of fuel and air and complete combustion in the combustion chamber, and a reduction of fuel consumption rate by 2%. A method for fuel distribution and combustion is also disclosed.