In this book use of poultry litter oil biodiesel obtained from wastes of the poultry industry, which is a non-edible source for biodiesel, as an alternative fuel for a diesel engine is studied. Further study has been made to understand the behavior of Diesel engine with poultry litter oil biodiesel by adding alumina nanoparticles and ethanol. The biodiesel is prepared by acid and base-catalyzed transesterification of poultry litter oil with methanol using concentrated sulphuric acid and potassium hydroxide as catalysts. The experimentation is carried out on a CI engine with three different blends- B20 biodiesel blend, B20 biodiesel blend with 30 mg/L alumina nanoparticles, and B20 biodiesel blend with 30 mg/L alumina nanoparticles and 15 ml/L ethanol. The performance, combustion and emissions characteristics of all three blends are compared with neat diesel. The results of the experiment show that ethanol as an additive improves combustion and performance characteristics. Addition of ethanol increases the brake thermal efficiency and peak cylinder pressure. It also reduces CO and UBHC emissions and there is a marginal increase in NOx emissions as compared to neat diesel