In the present work, the biodiesel from non-edible neem oil (Azadirachta indica) is prepared by the method of two-step acid-base' process. An experimental investigation has been carried out to analyze the performance, emission, and combustion characteristics of a diesel engine fueled with neem oil methyl ester and its blends (10, 20, 30, 50, and 100%) vis-a-vis diesel at different loads and constant engine speed. The performance parameters evaluated include brake thermal efficiency; exhaust emissions, including CO, HC, NOx, and smoke intensity; and combustion parameters, including cylinder pressure and instantaneous heat release rate. Lower concentration of neem oil methyl ester in the blend gives better engine performance, combustion, and exhaust emissions. The experimental results proved that the use of neem oil methyl ester in diesel engines is a viable alternative to diesel.