The role of additives for biodiesel has gained most reliable position in the current scenario as they reasonably formulate base fuel composition that contribute to efficiency reliability and long life of an engine. They also can have surprisingly large effects even when used in low (ppm) range. With the use of fuel additives for blending the biodiesel in compression ignition engine, one can expect diminished engine exhaust emission characteristics and also improved fuel properties, which could enhance the combustion characteristics. There are many reports based on the biodiesel blended with nanoparticles additive; however, there is a vacuum in the research pertaining to the use of the most common, low-cost, and eco-friendly CeO2 nanoparticles as additive to prepare blended canola biodiesel fuel. Moreover, there are very few literatures available on the usage of CeO2 blended biodiesel. In the present study, an attempt has been made to reduce and understand the engine emission of biodiesel blended with CeO2 nanoparticles.