Lemongrass oil is an alternate renewable energy source which has gained importance to meet the present environmental pollution. Addition of carbon nanotubes (CNT) improved the physiochemical properties of the fuel. Its presence increased the cetane number and calorific value of the fuel resulting in reduction of hydrocarbon emission, whereas NOx emission increased marginally. Also, CNT ensured additional oxygen availability by microexplosion which resulted in enhanced combustion process leading to transformation from CO to CO2. Higher cetane number of CNT blended fuel influenced the ignition delay, resulting, in prolonged combustion duration which led to reduction in smoke emission.