The innovation of underwater exhaust systems on ships increases onboard space, reduces noise emission and allows for zero direct emissions. For defense vessels, stealth is increased as the heat signature reduces due to underwater exhaust. However, there is a disadvantage of dynamic back pressure at the exhaust outlet which deteriorates the performance of the engine. The waves at the exhaust outlet are dynamic consisting of different wave heights depending on sea state and period. These waves cause dynamic back pressure at the exhaust outlet. Experimental and simulation investigations on the effect of externally applied static back pressure due to submerged exhaust is already carried out. It was found that there is an increase in fuel consumption and thermal loading with an increase in static back pressure. But, the sea waves acting at the exhaust outlet is dynamic with fluctuating amplitude and wave period. No experimentally validated research is available in the public domain to understand the effect of externally applied dynamic back pressure due to sea waves on the diesel engine performance. Thus, in this master thesis, the effect of the externally applied dynamic back pressure due to underwater exhaust on the performance of the diesel engine is investigated. Experiments are performed on a pulse turbocharged 4-stroke marine diesel engine at the Netherlands Defence Academy. Effects of dynamic back pressure on engine performance at different sea-states are investigated. The impact of wave significant height and wave period on the performance of the diesel engine is examined separately. Along with the performance of the diesel engine, the effect of back pressure on the emissions are also investigated. In this research experiment, the diesel engine under selected load points is subjected to single and continuous waves of back-pressure with changing amplitudes of 45 mbar, 35 mbar and 25 mbar(Gauge) while the periods were varied between 2, 4, 6, and 8 seconds. The back pressure is replicated with the help of an electronically controlled butterfly valve turbine outlet placed after which controls the resistance to exhaust gas flow to the atmosphere. A Diesel Engine - B model developed at TU-Delft is adopted and verified with the help of measured data from the experiments. The adopted model is a mean value engine model implemented in MATLAB/Simulink environment. Current literature lacks studies on experimental validation of the effects of dynamic back pressure on a marine diesel engine. The verified model is used to simulate the performance with higher sea states which may not be possible to simulate on a test bench. This research showed that exhaust side parameters (e.g Exhaust receiver temperature) are more critical than the inlet side parameters (e.g. Inlet receiver temperature). Moreover, there is an increase in parameters progressively with increase in the amplitude of back-pressure. Above a wave period value, the engine performance parameters changed by approximately equal values irrespective of varying periods above it. The impact of steady state back pressure is found more severe on the diesel engine’s parameters and fuel consumption compared to externally applied dynamic back pressure of the same amplitude. The recorded emissions show an increase in the concentration of carbon monoxide (CO), carbon di-oxide (CO2), nitrous oxide (NO) and sulphur di oxide (SO2) in the exhaust with an increase in back pressure. On the other side, the oxygen concentration decreases with increase in the applied steady state and dynamic back pressure. Simulations suggested that the governor plays a crucial role in tackling the effects of dynamic back pressure by controlling the fuel flow to the diesel engine. The simulation results are also used to provide the applied back pressure ceiling limits in terms of air excess ratio and exhaust valve temperature for the test engine.