Performance of an engine is the most generic necessity for any automobile company. The current interest of most automotive industries circles around their vehicles fuel economy and tail pipe emissions. This paper presents a study which explores a conventional source of energy from biofuels which lead to better performance and emission characteristics and also provides an alternative fuel to diesel. The biodiesel fuel obtained from Polanga oil (Calophyllum inophyllum) is fumigated at different flow rates along with air, and the diesel fuel was used as an ignition source. For this purpose, an electronically controlled fuel fumigator was fabricated and used in this investigation. The fuel characteristics like flash point, fire point, viscosity and lower heating values are measured. The performance and emission characteristics of the diesel engine were measured and the results were compared and presented in this paper.