Among the alternative fuels, biodiesel and its blends are considered suitable and the most promising fuel for diesel engine. The properties of biodiesel are found similar to that of diesel. Many researchers have experimentally evaluated the performance characteristics of conventional diesel engines fuelled by biodiesel and its blends. However, experiments require enormous effort, money and time. Hence, a cycle simulation model incorporating a thermodynamic based single zone combustion model is developed to predict the performance of diesel engine. The effect of engine speed and compression ratio on brake power and brake thermal efficiency is analysed through the model, The fuel considered for the analysis are diesel, 20%, 40%, 60% blending of diesel and biodiesel derived from Karanja oil (Pongamia Glabra). The model predicts similar performance with diesel, 20% and 40% blending. However, with 60% blending, it reveals better performance in terms of brake power and brake thermal efficiency. (C) 2010 Elsevier Ltd. All rights reserved.