Honne oil methyl ester (HOME) is produced from a nonedible vegetable oil, namely, honne oil, available abundantly in India. It has remained as an untapped new possible source of alternative fuel that can be used for diesel engines. The present research is aimed at investigating experimentally the performance, exhaust emission, and combustion characteristics of a direct injection diesel engine (single cylinder, water cooled) typically used in agricultural sector over the entire load range when fuelled with HOME and diesel fuel blends, HM20 (20% HOME?+?80% diesel fuel)HM100. The properties of these blends are found to be comparable with diesel fuel conforming to the American and European standards. The combustion parameters of HM20 are found to be slightly better than neat diesel (ND). For other blend ratios, these combustion parameters deviated compared with ND. The performance (brake thermal efficiency (BTE), brake-specific fuel consumption, and exhaust gas temperature) of HM20 is better than ND. For other blend ratios, BTE is inferior compared with ND. The emissions (CO and SO) of HM20HM100, throughout the entire load range, are dropped significantly compared with ND. Unburned hydrocarbon emissions of HM20HM40, throughout the entire load range, is slightly decreased, whereas for other blend ratios, it is increased compared with ND. NOx emissions of HM20, throughout the entire load range, is slightly increased, whereas for other blend ratios, it is slightly decreased. The reductions in exhaust emissions together with increase in BTE made the blend HM20 a suitable alternative fuel for diesel fuel and thus could help in controlling air pollution. Copyright (c) 2011 John Wiley & Sons, Ltd.