In order to realize a premixed compression ignition (PCI) engine by utilization of bio-alcohol, combustion characteristics of bio-alcohol blended with gas oil were compared between ethanol and n-butanol in a diesel engine. The effects of the ethanol blend ratio and the butanol blend ratio on ignition delay, premixed combustion, diffusion combustion, fuel consumption and exhaust emissions such as smoke density and NOx were investigated experimentally. It is found that ethanol almost burns out together with combustion of low evaporation temperature composition of gas oil in the premixed combustion period and the heat release in the diffusion combustion is based on mainly high evaporation temperature composition of gas oil, then, soot is formed in the diffusion combustion of gas oil. On the other hand, a part of butanol burns in the diffusion combustion, however, the combustion of butanol in the diffusion stage is not the cause of soot formation. Butanol is more useful in comparison with ethanol because butanol can be blended with gas oil without surface-active agent, and fuel consumption and smoke are almost equal in both blend fuels if the alcohol blend ratio is the same.