Madhuca indica flower is a forest residue used for preparation of food and liquor in tribal areas of India. In this present investigation, bioethanol produced from madhuca indica flower by the fermentation process is proposed as an alternative fuel for diesel engines. As the cetane number of bioethanol is low, an ignition improver is required for better operation. In this study, Diethyl ether (DEE), an ignition improver is fumigated at two different flow rates viz 120 g/h and 240 g/h in the intake manifold along with the air in a single cylinder, four stroke, DI diesel engine developing a power of 4.4 kW at a rated speed of 1500 rpm. The brake thermal efficiency (BTE) is found to be higher by about 10.47 and 2.46% with 120 g/h and 240 g/h flow rate of the DEE respectively, compared to that of diesel at full load. The brake specific nitric oxide (BSNO) emission is found to be lower for both the flow rates, but the brake specific carbon monoxide (BSCO) and brake specific hydrocarbon (BSHC) emission are found to be higher for the flow rate of 240 g/h compared to 120 g/h of DEE and diesel at full load.