Butanol can be produced from renewable sources and is a promising alternative engine fuel. Experiments were conducted on a turbocharged three cylinder automotive common rail diesel engine that was modified to accommodate solenoid based butanol port fuel injectors. The engine was run in the dual fuel mode with diesel being directly injected. Blends of water and butanol (up to 30% water by mass) were injected. Initially diesel was injected as a single pulse per cycle and the timing was always set at the one for best efficiency. The engine speed was kept at 1800 rpm at different fixed load conditions. Open engine controllers were used for varying the injection parameters of diesel and butanol. Standard instrumentation was used for emissions. Combustion parameters were obtained from average cylinder pressure crank angle data processed using in-house developed software. Water butanol blends improved the brake thermal efficiency (BTE) by a small extent because of better combustion phasing as compared to butanol without water. It was also possible to enhance the butanol diesel energy share (BDES) because the auto-ignition of butanol was controlled. Though increase in the BDES led to decrease in the NO emission because of reduced charge temperature the water in the blend had little impact due to its small quantity. Smoke was reduced with increased BDES. High BDES resulted in auto-ignition of butanol before diesel which also lowered the ignition delay of diesel and elevated the smoke level. Two separated heat release phases were thus observed. Water in the blends controlled auto-ignition and reduced smoke because water also provides oxygen and the water vapour also reacts with soot precursors. Blending water with butanol enhanced the amount of butanol that could be used. Post injection was able to lower smoke levels and improves BTE.