Vegetable methyl ester was added in ethanol-diesel fuel to prevent separation of ethanol from diesel in this study. The ethanol blend proportion can be increased to 30% in volume by adding the vegetable methyl ester. Engine performance and emissions characteristics of the fuel blends were investigated on a diesel engine and compared with those of diesel fuel. Experimental results show that the torque of the engine is decreased by 6%-7% for every 10% (by volume) ethanol added to the diesel fuel without modification on the engine. Brake specific fuel consumption (BSFC) increases with the addition of oxygen from ethanol but equivalent brake specific fuel consumption (EBSFC) of oxygenated fuels is at the same level of that of diesel. Smoke and particulate matter (PM) emissions decrease significantly with the increase of oxygen content in the fuel. However, PM reduction is less significant than smoke reduction. In addition, PM components are affected by the oxygenated fuel. When blended fuels are used, nitrogen oxides (NOx) emissions are almost the same as or slightly higher than the NOx emissions when diesel fuel is used. Hydrocarbon (HC) is apparently decreased when the engine was fueled with ethanol-ester-diesel blends. Fuelling the engine with oxygenated diesel fuels showed increased carbon monoxide (CO) emissions at low and medium loads, but reduced CO emissions at high and full loads, when compared to pure diesel fuel. (c) 2008 Elsevier Ltd. All rights reserved.