Abstract: There is an increasing interest in India, to search for suitable alternative fuels that are environment friendly. This led to the choice of Mahua Oil (MO) as one of the main alternative fuels to diesel. In this investigation, Mahua Oil Biodiesel (MOB) and its blend with diesel were used as fuel in a single cylinder, direct injection and compression ignition engine. The MOB was prepared from MO by transesterification using methanol and potassium hydroxide. The fuel properties of MOB are close to the diesel and confirm to the ASTM standards. From the engine test analysis, it was observed that the MOB, B5 and B20 blend results in lower CO, HC and smoke emissions as compared to diesel. But the B5 and B20 blends results in higher efficiency as compared to MOB. Hence MOB or blends of MOB and diesel (B5 or B20) can be used as a substitute for diesel in diesel engines used in transportation as well as in the agriculture sector.