The charge cooling effect of methanol was studied and compared to that of iso-octane. The reduction in compression work due to fuel evaporation and the gain in expansion work were evaluated by the means of in-cylinder pressure measurements in a HD CI engine. A single injection strategy was utilized to obtain a longer premixing period to adequately capture the cooling effect. The effect was clear for both tested fuels, however, methanol generally caused the pressure to reduce more than iso-octane near TDC. It was found that the contribution of reduced compression work to the increased net indicated efficiency is negligible. Regarding the expansion work, a slower combustion with higher pressure was obtained for methanol in comparison to that of iso-octane due to the cooling effect of fuel evaporation. As a result from this, a lower heat transfer loss was obtained for methanol, in addition to the significantly lower NO x emissions.