The continuous rise in environmental pollution has attracted the attention of researchers in clean alternative fuels for internal combustion engines. In the present study, experimental investigations were carried out on a small size, modified, variable compression ratio diesel engine with n-butanol-diesel blends (10-25% by volume) as fuel to determine the optimum blending ratio and operating parameters for reduced emissions. Full Factorial design approach was employed for modeling and analysis of experimental data. The experiments were planned and performed in three distinct phases at a constant speed of 1500 rpm and at varying engine load (12, 16, 20 and 24 Nm). The engine loads, blending ratio, compression ratio, injection timing and injection pressure were taken as input parameters and their effects on engine performance and emissions were investigated experimentally and analytically. In the modeling work, reduced quadratic and cubic prediction models were developed, checked for normality and homogeneity and parameters were optimized for desired responses. The optimum results were observed with twenty percent n-butanol-diesel blend (B20) at a higher compression ratio of 19.5 as compared to 18.5 for diesel under similar operating conditions. Brake thermal efficiency improved by 5.54% and smoke & nitrogen oxides decreased by 59.56% & 15.96% respectively for B20 in comparison to diesel at full load condition. Results of the study show that n-butanol-diesel blend is a potential fuel to reduce emissions from diesel engines with improved performance. A close match between experimental results and prediction results reveals that the developed models can be used with adequacy to optimize similar type of diesel engines using n-butanol-diesel blends.