The increasing rate of fossil fuel depletion and large scale debasement of the environment has been a serious concern across the globe. This twin problem of energy crises has caused researchers to look for a variety of solutions in the field of internal combustion engines. In this current scenario the issue of fuel availability has increased the use alternative fuels, especially alcohol derived fuels. Alcohol-diesel blends can be been seen as a prominent fuel for CI engine in the near future. Previous research on the use of alcohol as an alternative fuel in CI engines is restricted to short branch alcohols, such as methanol and ethanol. Despite their comparable combustion properties longer chain alcohols, such as butanol, isobutanol and pentanol have been barely investigated. In the present study performance and emission characteristics of an isobutanol-diesel blend was studied. One of the major problems encountered by isobutanol in CI engines is its low cetane rating. The blending of isobutanol in diesel helps in overcoming this problem. This fuel shows several advantages, such as reduced CO, NOx and PM emissions, low corrosive nature and low solubility in water. In the present study the test fuel used was 10% isobutanol by volume in diesel fuel. The test engine used for the present study was a single cylinder 4-stoke CI engine with exhaust gas recirculation (EGR) using EGR intercooler. Among various NOx reduction strategies, viz. selective catalytic reduction (SCR), fuel additives, retarded injection and exhaust gas recirculation (EGR), EGR was chosen in the present experimentation. Study was also done to study the effect of using an EGR intercooler on performance and emission of the engine. Seven parameters, viz. Brake thermal efficiency (BTE), brake specific fuel consumption (BSFC), Exhaust gas temperature, Unburned Hydrocarbon emission (UHC), Carbon monoxide Emission (CO), Oxides of nitrogen emission (NOx) and Smoke opacity were determined at all the operating conditions. IB10 was found to have a higher BTE compared to diesel. Also NOx and CO emissions were low, but higher UHC emissions were recorded. Using EGR with an intercooler was more effective in reducing NOx compared with EGR without an intercooler. However, employing an intercooler reduced BTE and increased other emissions.