An experimental study was performed to evaluate the effects of ethanol blending on to gasoline spray and combustion characteristics in a spray-guided direct-injection spark-ignition engine under lean stratified operation. The spray characteristics, including local homogeneity and phase distribution, were investigated by the planar laser-induced fluorescence and the planar Mie scattering method in a constant volume chamber. Therefore, the single cylinder engine was operated with pure gasoline, 85 %vol, 50 %vol and 25vol % ethanol blended with gasoline (E85, E50, E25) to investigate the combustion and exhaust emission characteristics.Ethanol was identified to have the potential of generating a more appropriate spray for internal combustion due to a higher vapor pressure at high temperature conditions. The planar laser-induced fluorescence image demonstrated that ethanol spray has a faster diffusion velocity and an enhanced local homogeneity. In comparison to the isooctane spray from the planar Mie scattering images, ethanol spray was verified to have a smaller liquid phase area in the spark plug position. This is an indication for ethanol spray to feature a faster vaporization and this to be more suitable for stable ignition.With gasoline, the retardation of the injection timing was limited to 24 crank angle degree (CAD) before top dead center (TDC) because a locally rich mixture at high ambient pressure. With ethanol blending, the injection timing could be retarded closer to the TDC as the ethanol content increased. These results can be explained by the faster vaporization and enhanced local homogeneity of ethanol. As a result, a higher IMEP was achieved by retarding the combustion phase near to the TDC. The NOx emissions were decreased with ethanol blending due to the lower peak of in-cylinder temperature by the combustion retardation. Ethanol-blended gasoline also showed less smoke emission due to the reduced local enrichment region and the kinetic characteristics of ethanol as an oxygenated fuel.