Biodiesel obtained by transesterification process from the fatty leather waste (tannery waste water) was blended with Diesel in various proportions and it was tested in a single cylinder, naturally aspirated, direct injection (DI) Diesel engine of rated power 4.4 kW at the rated speed of 1500 rpm. Experiments were conducted with B10, B20, B30, B40 and B50 blends and their combustion, performance and emission characteristics were studied in comparison with conventional Diesel fuel. The experimental results show an increase in brake thermal efficiency with biodiesel blends compared to neat Diesel operation. Reduced ignition delay and combustion duration is observed for B30 blend compared to Diesel. The oxides of nitrogen emissions are significantly lower for B10 and B20 blends compared to Diesel operation, whereas with remaining blends the NOx emissions are increased compared to Diesel fuel. It is observed that the unburnt hydrocarbon and carbon monoxide emissions are lower for B30, B40 and B50 blends compared to other fuel blends and neat Diesel fuel.