Diesel engines are highly preferred for transportation since they are highly efficient and durable in the long run. However, because of the lack of crude oil reserves, fuel cost and emission norms, alternative fuels are of high interest to replace diesel fuel in diesel engines. Many alternative liquid fuels for diesel engines such as bio-diesel, alcohol have been introduced in the recent past. Today Most of the alternative fuels are biomass-derived and easily available. Many alternative fuel blends have been introduced in the past and they gave very satisfying results. Therefore, in this project, the eucalyptus oil which is high octane biomass-derived fuel is blended with diesel in different proportions by volume and used as fuel in the four-stroke single-cylinder diesel engine. The performance and emission characteristics of the engine were studied. The results show the reduction in consumption of fuel as the brake specific fuel consumption was found to decrease. The improvement in brake thermal efficiency is also observed. While the emission parameters were also improved, emissions were significantly reduced as the load was increasing.