According to the theory of "hydrophilic-lipophilic balance (HLB)'' and the emulsification principle, the emulsification performance and stability of ethanol-diesel blends were studied with single and mixed emulsifiers and the effects of temperature on emulsification properties were analyzed. A novel mixed emulsifier, named "CLZ'', was developed based on biofuel and castor oil and the effects of the ethanol-diesel blends with CLZ were investigated on the performance and emission characteristics of a diesel engine. The results indicated that with a CLZ-type emulsifier the ethanol-diesel blend E10 can keep its physical stability at a wide range of temperatures. The use of ethanol-diesel blends with a CLZ improved the break thermal efficiency and reduced the equivalent brake-specific fuel consumption (BSFC). The smoke emission was reduced significantly and the NOx emission decreased slightly, while the THC emission increased. The CO emissions increased at light loads and decreased at heavy loads. (C) 2011 Published by Elsevier Ltd.