He is the first to be charged as part of the US Justice Department’s year-long criminal probe into the firm’s rigging of federal air-pollution tests.
James Liang pleaded guilty to violation of the clean air act, a wire fraud count and a consumer fraud count.
Volkswagen has already agreed to spend up to $16bn (£12bn) to address environmental, state and owner claims.
Mr Liang, who is a German national, worked in VW’s diesel development department in Germany from 1983 to May 2008, before moving to the US.
He was part of a team of engineers based in Ann Arbor, Michigan that conducted emissions tests on the diesel engine at the heart of the controversy.
He could face five years in prison although by cooperating with the US federal government, he could reduce his jail time.
His trial will be held in January.
The scandal blew up after an investigation found that many Volkswagen cars being sold in America had software in diesel engines that could detect when they were being tested.
The so-called “defeat device” changed the performance of the engines accordingly to improve results.
The German car giant has admitted cheating emissions tests in the US.