Spark-assisted diesel engines operated with alcohol fuels usually display misfiring or knocking problems. This paper presents an analysis of the factors influencing the ignition characteristics of ethanol in a swirl chamber diesel engine with a multi-spark ignitor. In the experiments, cycle-to-cycle combustion variations and the degree of knocking were investigated by changing engine parameters over a wide operating range. The results of the investigations showed that stable ignition and smooth combustion is achieved when a flammable mixture is formed in the vicinity of the spark plug when only a small amount of the injected fuel has evaporated. By optimizing the design factors, operation with high efficiency and low exhaust emissions was achieved.