Non-edible vegetable oils have a huge potential for biodiesel production and also known as second generation feedstock’s. Biodiesel can be obtained from edible, non-edible, waste cooking oil and from animal fats also. This paper focuses on production of biodiesel obtained from mixture of sesame (Sesamum indicum L.) oil and neem (Azadirachta indica) oil which are easily accessible in India and other parts of world. Neem oil has higher FFA content than sesame oil. Biodiesel production from neem oil requires pretreatment neutralization procedure before alkali catalyzed Trans esterification process also it takes large reaction time to achieve biodiesel of feasible yield. Neem oil which has very high FFA and sesame oil which has low FFA content are mixed and this mixture is Trans esterified with no pre-treatment process using molar ratio of 6:1.Fuel properties of methyl ester were close to diesel fuel and satisfied ASTM 6751 and EN 14214 standards. Fatty acid composition of methyl ester of these oils are determined by Gas Chromatography (GC) technique. The oil characterization allowed the identification of nine fatty acids. The optimum biodiesel combination was further blended with diesel in various proportions to evaluate the emission and performance characteristics of single cylinder, direct injection, diesel engine. Parameters like, brake thermal efficiency, brake mean effective pressure, brake specific energy consumption and emissions of exhaust like carbon monoxide (CO), hydrocarbon (HC) and NOx produced by engine were recorded. The results obtained shows that various blends like B10 and B20 of mixed oil biodiesel (obtained from mixture of neem and sesame oil) with diesel can be used as an alternative fuel in C.I engine.