The present work attempted to investigate the performance and emission characteristics of a diesel engine using conventional diesel fuel with mixtures of animal and vegetable derived bio-diesel that are available in Mexico and ultra low sulphur diesel with varying proportions. This work aimed at studying the performance of the engine at representative ambient conditions of Mexico City which is at an altitude of 2240m above sea level. The work identified that the levels of CO in the exhaust has a strong correlation with the proportion of bio-diesel in the conventional diesel fuel used. However, the performance of the engine, torque and power, are not affected significantly by varying the proportion of animal and bio-derived fuels in diesel fuel. In addition it also identified the correlation between the proportions of bio-diesel in diesel with the engine out particulate matter and the performance of diesel oxidation catalyst. Overall, this study provided data that selective blend with appropriate levels can be used to reduce selective emission species rather than using the bio-fuel blend for overall emission reductions. The experiments and the systematic approach followed to identify the correlations, the findings and conclusions are presented in this paper.