The use of alternative fuel has many advantages and the main ones are its renewability, biodegradability with better quality exhaust gas emission, which do not contribute to raise the level of carbon dioxide in the atmosphere. The use of non-edible vegetables oils as an alternative fuels for diesel engine is accelerated by the energy crisis due to depletion of resources and increase in environmental problems. In Asian countries like India, great need of edible oil as a food so cannot use these oils as alternative fuels for diesel engine. However there are many issues related to the use of vegetable oils in diesel engine that is high viscosity, low calorific value, high self-ignition temperature etc. Jatropha curcas has been promoted in India as a sustainable substitute to diesel fuel. This research prepared micro emulsions of ethanol and Jatropha vegetable oil in different ratio and find out the physico-chemical parameters to compare with mineral diesel oil. Also compare the performance and emissions characteristics of single cylinder, air cool diesel engine fuelled with micro emulsion of Jatropha vegetable oil with different percentage of ethanol and diesel fuels separately. It has been found that at part load condition the brake thermal efficiency and brake specific energy consumption of blends of jatropha oil and ethanol is insignificant. Basic HC, CO emissions and smoke opacity were reduced at part load condition. However, there was a decrease in NOx in case of jatropha oil and ethanol at full load condition.