Soot is a major anthropogenic air pollutant that affects human health and contributes to global warming. To understand its formation pathways and reduce emission, several flame and engine studies exist in the literature, though the fundamental differences in the characteristics of engine and flame soots are not well understood. This study presents a detailed comparative investigation of soot nanostructural properties and their relationship with the oxidative reactivity of soots from an engine and a diffusion flame using diesel and 20% Jatropha biodiesel/diesel blend fuels. X-ray diffraction, Raman spectroscopy, high-resolution transmission electron microscopy, electron energy loss spectroscopy, and thermogravimetric analyses confirm that engine soot has greater primary particle diameter, higher concentration of loosely held aliphatics, greater degree of graphitized nanocrystallites with lower interplanar separation, longer fringe lengths, lower tortuosity, and greater resistance for oxidation than the flame soot, though the differences in several properties were minor. The effects of biodiesel addition to diesel on soot properties and sooting tendency were predicted very well with both flame and engine setup. Moreover, the enhanced soot oxidation in the combustor catalyzed by fuel-bound oxygen in biodiesel further reduces the nanostructural and reactivity differences between engine and flame soots. Though engine soot properties have more relevance to anthropogenic particulate matter, flame setups appear to be suitable for screening and studying the effect of fuel additives on the sooting propensity and physicochemical properties of soot prior to their testing and utilization in engines.