This study reports, biodiesel derived from (i) Coconut oil blended with methanol and (ii) Coconut oil blended with methanol with Ferro fluid (Fe3O4) have been chosen for testing and analysis. Several engine emission tests have been carried out and results have been tabulated. The experiments disclose that the blend of Ferro fluid (Fe3O4) as a fuel reduces the overall percentage of exhaust gases from the engine. Among the blends tested (B80M20, B80M20F4, B80M20F6), the blend B80E20D6 (80% Coconut oil biodiesel and 20% Methanol blended with 6ml Ferro fluid) proved to be superior, displaying better engine emission characteristics, in comparison with the other blends.