Diesel engines are employed particularly in the field of heavy transportation and agriculture on account of their higher thermal efficiency and durability. As these engines, are the backbones of contemporary global transportation and accounts a 30% of world's energy consumption, which is second highest after the industrial sector. Therefore, the fossil fuel consumption becomes the prime concern. Following the global energy crisis and the increasingly stringent emission norms, the search for alternative renewable fuels has intensified. Currently, biodiesel (BD) has been identified as the most attractive and practical choice to replace fossil fuel as the main source of energy, due to the similarity in the properties with conventional diesel. However, its development and application have been hindered by the high cost of required feedstock. Therefore, in recent years, researchers have been seeking the alternative sources of non-edible oil which are economical. The orange peel oil emerges as a good competitor in the field of alternate oil for BD production, due to its low viscosity and low cold flow plugging temperature. In the present investigation various blends of Orange peel oil methyl ester and isopropyl alcohol with diesel were prepared on volumetric basis and named as B5IP5 (5% Orange peel oil methyl ester and 5% isopropyl alcohol with 90% Diesel), B10IP5 (10% Orange peel oil methyl ester and 5% isopropyl alcohol with 85% Diesel), B15IP5 (15% Orange peel oil methyl ester and 5% isopropyl alcohol with 80% Diesel), B20IP5 (20% Orange peel oil methyl ester and 5% isopropyl alcohol with 75% Diesel). All blends were found homogenous and stable. Various physico-chemical properties of blends have been tested using high precision instruments according to their respective standards. In the consequent phases of experiment exhaustive engine trials were carried out on a single cylinder medium capacity diesel engine using all test fuel samples. Performance and emission evaluation has been done for the same and compared with diesel. The result shows a significant reduction in emission of oxides of nitrogen (NOx) for 5% IP blend while other blends having biodiesel content shows a significant increase in NOx emission. At the same time brake thermal efficiency increased slightly for the blends having higher BD content. The HC and CO emissions were found to be decreasing with the increase percentage of BD in the fuel, also the smoke opacity was least for B20IP5.