There is growing interest to study the effect of blending various oxygenated additives with diesel or biodiesel fuel on engine performance and emission characteristics. This study aims to analyze the performance and exhaust emission of a four-stroke, four-cylinder diesel engine fueled with biodiesel-ethanol-diesel. Biodiesel was first produced from crude Jatropha oil, and then it was blended with ethanol and fossil diesel in different blend ratios (B10E10D80, B12.5E12.5D75, B15E15D70, B20E20D60 and B25E25D50). The engine performance and emission characteristics were studied at engine speeds ranging from 1200 to 2000 rpm. The results show that the brake specific fuel consumption increases while the brake power decreases as the percentage of biodiesel and ethanol increases in the blend. The exhaust emission analysis shows a reduction in CO2 emission and increase in NOx emission when the biodiesel -to- ethanol ratio increases in the blends, when compared with diesel as a reference fuel.