Reliability of equipment has long been considered as an important quality characteristic. Traditional methods of equipment reliability assessment are based on lifetime data. With equipment being much more reliable and the growing need for developing new equipments within shorter period and at lower cost, we can hardly get enough lifetime data in many cases. Performance degradation data can also be used for reliability assessment. This paper is mainly researched on reliability of a certain diesel engine. Through analyzing the failure mode and failure mechanism, performance degradation parameters of the diesel engine is selected as compression pressure in a cylinder while driven by an electrical motor. Based on a long time accumulation on performance degradation data, two methods of degradation path fitting and degradation value distribution are tried in this paper to evaluate reliability of the diesel engine. Besides, the regulation of the reliability variation is given by the results of the assessment.