The main aim of this work is to characterize the combustion phenomena and particulate matter in nano-size from the reactivity controlled compression ignition (RCCI) engine using neat hydrous ethanol as a low reactivity fuel. A four-cylinder diesel engine fueled with diesel (the volumetric blend of 95% petroleum diesel and 5% palm-based biodiesel) was operated on low and medium loads at 2,500 rpm without main diesel fuel injection modification and exhaust gas recirculation. Ethanol was injected at 1 bar pressure into the intake manifold while the w/w ratios of ethanol:diesel were varied between 0 and 0.77. 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. A Scanning Mobility Particle Sizer and an Optical Particle Sizer were used to determine the particle number concentration and distribution over nano-size range. The increased portion of ethanol pre-mixture results in longer ignition delay corresponding to the reduction in main diesel fuel consumption. Compared with diesel fuel combustion, the higher ethanol pre-mixture leads to a smaller average size of the particles but gives rise to a higher number concentration.