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Use of biofuels derived from biomass, bioethanol, biodiesel, etc., are being seriously viewed from multidimensional perspective of depleting fossil fuel resources, environmental health, energy security, agrarian economy and new avenues of gainful employment. For the best use of available biofuels in diesel, a new blend was prepared which constituted 85% diesel + 5% ethanol + 10% biodiesel and was evaluated on Light Commercial Vehicle. This paper discusses the systematic performance evaluation of blended fuels and is compared with neat diesel with respect to lubricity, fuel economy in the steady speed ranges of 40 - 70 km/hr, driving cycle fuel economy, exhaust emissions like CO, HC, CO₂, O₂, NOx, smoke and characterization of particulates including particle size distribution. Synergy of 5% ethanol + 10% biodiesel in diesel was compared with diesel when the fuel was used as individual blends.