Biodiesel is a renewable substitute to conventional diesel and offers cleaner performance. Thispaper deals with performance characteristics of four stroke, water cooled Compression Ignition (CI) enginefuelled with four different oils: diesel, diesel-punnai oil biodiesel 10% (B10), diesel-punnai oil biodiesel20% (B20) and diesel-punnai oil biodiesel 30% (B30). The present research, experiments were conductedto study the effect of viscosity, cetane number, flash point, calorific value and density on performancecharacteristics of diesel, Punnai oil biodiesel and its different blends (B10, B20, B30). The experimentalresults of this study showed that the diesel has 2.6% and 4.6% higher brake specific fuel consumption(BSFC) as compared to B10 and B20, respectively at full load, whereas BSFC of diesel was same as B30at higher load. Volumetric efficiency and mechanical efficiency of B10 was 1.2% and 7.5% higher ascompared to diesel at full load condition. Brake Thermal Efficiency (BTE) and indicated thermal efficiencyof B20 was 8.12% and 7% higher as compared to diesel at full load. From this study, it is concluded thatPunnai oil biodiesel could be used as a viable alternative fuel in a single cylinder, four stroke, water cooleddirect injection diesel engine.