The impact of nano-additives with the diesel and biodiesel fuels is one of the current scopes of research with regards to the fuel modification techniques. Intensive research is underway to utilize the nano-additives judiciously without affecting our ecological environment. In the present work, the effects of nano-additives (Alumina and Carbon Nanotubes) blended biodiesel emulsion fuels on the performance, smoke, gaseous emission and combustion characteristics of a constant speed four stroke single cylinder direct injection diesel engine was investigated. It is recognized that emissions of nanoparticles from diesel engines is of great concern and that if this work demonstrates a performance benefit then further work will be focused on the health impact issues. Esterification and emulsification techniques were adopted to prepare the jatropha biodiesel and jatropha water-biodiesel emulsion fuels respectively. The whole investigation was carried out in five phases. In the first phase, both neat diesel and neat jatropha biodiesel fuel were tested in the diesel engine to obtain the reference readings. In the second phase, neat jatropha water-biodiesel emulsion fuel was prepared in the proportion of 76% of biodiesel, 20% of water and 4% of surfactants (by volume). In the third phase, 50 ppm Alumina, 50 ppm CNT, and 100 ppm (50 ppm Alumina + 50 ppm CNT) were blended with the neat biodiesel emulsion fuel separately to prepare the nano-additive blended water-biodiesel emulsion fuels. In the fourth phase, all the prepared emulsion fuels were subjected to the stability investigations. In the fifth phase, the prepared stable emulsion fuels were subjected to the experimental investigations in a constant speed (1500 rpm) four stroke air cooled direct injection diesel engine. The experimental outcome revealed an appreciable enhancement in the performance and reduced smoke and gaseous emissions for the nano-additive blended water-biodiesel emulsion fuels when compared to that of neat diesel and neat biodiesel. At the higher loads, the nano-additive blended water-biodiesel emulsion fuels exhibited higher brake thermal efficiency and reduced smoke and gaseous emissions when compared to that of neat diesel and neat biodiesel.