Computational investigation was carried out in an optical constant volume chamber to explore the combined effects of initial ambient temperatures (800, 900, and 1000 K) and n-butanol additive (20% volume fraction of n-butanol) on diesel combustion and soot characteristics. An improved phenomenological soot model integrated with a reduced n-heptane/n-butanol/polycyclic aromatic hydrocarbon (PAH) mechanism was developed and implemented into the KLVA-3V R2 code to study the soot formation and oxidation mechanism. The predicted chamber pressure and heat release rate as well as soot mass trace and distribution showed good agreements with the experimental data. Results indicated that the ignition delay was retarded and total soot mass was reduced with the decrease of initial ambient temperature and with the n-butanol additive. The heat release rate of pure diesel demonstrated a transition from diffusion-dominated combustion at 1000 K to premix-dominated combustion at 800 K. Diesel/n-butanol blend showed no obvious combustion transition but more intensive premixed combustion with the decrease of initial ambient temperatures. Analysis of soot intermediate species of pure diesel and diesel/n-butanol blend revealed that the soot formation and oxidation mechanism were both restrained at lower initial ambient temperatures. The soot formation of diesel/n-butanol blend was weaker than that of pure diesel, however, the soot oxidation remained the same level for both fuels varying with the initial ambient temperatures. The quantitative and spatial distribution analysis indicated that the suppressed formation mechanism of soot and its intermediate species would play a leading role in the reduction of soot with decreasing initial ambient temperatures and with the n-butanol additive, which can be explained by the shrinking of high-temperature and fuel-rich zone.