The combustion in reactivity controlled compression ignition (RCCI) mode of diesel engine have been gained more attention as one among other strategies to increase operating range for premixed combustion and to improve fuel economy. A low reactivity fuel such as high octane number fuel, alcohol blends for example, is early fumigated (or injected) and premixed with air prior to induction to the combustion chamber. Later on adjacent to the end of the compression stroke, the diesel fuel as a high reactivity fuel is directly injected into the homogeneous pre-mixture and ignited. This can also promote lower nitrogen oxides and particulate matter emissions. The main aim of this work is to characterize the combustion phenomena and particulate matter in nano-size from the RCCI engine using neat hydrous ethanol as the low reactivity fuel. A four-cylinder diesel engine fueled with the volumetric blend of 95% petroleum diesel and 5% palm-based biodiesel (B5) was operated on low to medium loads at 2,500 rpm without main diesel fuel injection modification and exhaust gas recirculation (EGR). Ethanol was injected at 1 bar pressure into the intake manifold while the premixed w/w ratios of ethanol:diesel were varied between 0 and 0.5. An engine indicating system composed of an in-cylinder pressure transducer and a shaft encoder was used to investigate combustion characteristics using the first law of thermodynamics. An electrical mobility spectrometer was used to determine the particulate number concentration and distribution. The increased portion of ethanol pre-mixture results in longer ignition delay with higher brake thermal efficiency corresponding to the reduction in main diesel fuel consumption. Compared with neat diesel combustion, the higher ethanol pre-mixture leads to a smaller average size of the particles but gives rise to a higher number concentration depending on engine operating conditions, with the differences varying between nucleation and accumulation mode.