The use of butanol as an alternative biofuel blend component for conventional diesel fuel has been under extensive investigation. However, some fuel properties such as cetane number and lubricity fall below the accepted values as described by the ASTM D 975 diesel specifications. Blending 10% butanol with #2 ULSD decreases the cetane number by 7% (from 41.6 to 39.0). At higher butanol blend levels, i.e., 20% v/v, the cetane number decrease cannot be compensated for; even with the addition of a 2000 ppm level commercial cetane improver. The decreased cetane number, or in other words, increased ignition delay, can be attributed to the increased blend level of low cetane butanol as well as the critical physical properties for better atomization of fuels during auto ignition such as viscosity. The kinematic viscosity dropped sharply with increasing butanol blend level up to 25 % v/v, then increased with further increase of butanol blend level. Also, the addition of butanol decreases the lubricity properties of conventional diesel. Interestingly, blending biodiesel (fatty acid methyl esters) with butanol-diesel mixtures restores the required properties of diesel fuel for compression ignition. In this study, biodiesel and butanol were blended with commercial diesel fuel at different ternary mixture compositions to characterize the key fuel properties of the blends such as cetane number, viscosity, lubricity, flash point and cold filter plugging point. An optimum ternary mixture of biodiesel-butanol-diesel will be developed based on the physical properties which can be used in CI engines without altering engine parameters or the addition of performance enhancers. In addition the feasibility of using green diesel (hydrotreated animal fats) as a matrix for butanol blending was also investigated.