Diesel engine plays a vital role in power generation, transportation and industrial activities. The main advantages of the diesel engine over the gasoline spark ignition engine include its durability, reduced fuel consumption and lower emission of carbon monoxide and unburned hydrocarbon. Due to higher efficiency, diesel engines are of high interest in light duty vehicles. The objective of the present study is to investigate the effect of aluminium oxide nanoparticles blended diesel fuel combustion, performance and exhaust emission characteristics of a diesel engine. Experiments were conducted to determine engine performance, emissions and combustion characteristics in a single cylinder diesel engine using diesel fuel (DF) and diesel fuel blended aluminium oxide nanoparticles in mass fractions of 25ppm (DF+AONP25) and 50ppm (DF+AONP50), respectively with the help of a sonicator. After a series of experiments it was observed that 25ppm of aluminium oxide nanoparticles blended fuel exhibits a significant reduction in specific fuel consumption and hydrocarbon emissions at all operating loads compared to other cases. There is a considerable reduction in carbon monoxide and smoke emissions. Due to complete combustion NOx emissions increases. The results also showed a considerable enhancement in brake thermal efficiency due to the influence of aluminium oxide nanoparticles addition in diesel blend. As the dosage level of aluminium oxide nanoparticles increases to 50ppm the brake thermal efficiency, HC, CO and NOx emissions decreases considerably with respect to 25ppm of aluminium oxide nanoparticles blend. There is a noticeable increase in specific fuel consumption and smoke emissions of DF+ANOP50 with respect to DF+ANOP25.