Yes, EGR systems introduce a certain quantity of inert gases in combustion chamber, lowering combustion temperatures and so reducing NOx formation. This effect is comparable to that of water injection, or to the use of a fuel/water emulsion, such as the so called (in Europe) "white Diesel oil". EGR recirculation is used especially for Diesel engines and lean-burn gasoline direct injection engines, where the high air/fuel ratios at wich these engines operate would lead to a very poor reduction efficiency of the trivalent cathalythic converters. Typically, on these engines are used bivalent cathalythic converters (oxydation of CO and HC to CO2) associated with an EGR system.
Recently, throttled Diesel engines have been tested: using an electronic controlled throttle valve (ETC), it's possible to lower the intake manifold pressure and increase the fraction of recirculated gases, being their mass flow related to the exhaust/intake pressure ratio. This, in future, can contribute to the NOx reduction in Diesels, always a critical emission of these engines. To increase volumetric efficiency is also widely used an EGR cooler, a gas/liquid heat exchangers using engine's cooling water.