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 isooctane 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 NOx emissions.