The shortage of fossil fuels is a significant political and economic issue that occurred due to global reliance on fossil fuels. The fuel characteristics of the produced diesel and biofuel (viscosity, density, cloud point, flash point, acid number, lower heating values, and pour point) are then determined. It is anticipated that using biofuel will result in higher fuel usage than using diesel fuel. This scenario also has an impact on the emissions. Biofuel has a higher density than diesel fuel, which has a detrimental impact on emissions and engine performance. It may be inferred that, while using the identical diesel engine for comparison, the effects of waste oil-derived biofuel are distinct from those of diesel fuel. Therefore, in order to achieve the best outcomes, it is crucial to develop new forms of biofuels. Nanomaterials (NMs), like copper oxides, titanium oxides, and aluminium oxides have been developed to be the most promising fuel additives for diesel engines in recent years. A significant amount of laboratory testing has been conducted up to this point to investigate the impact of using nano fuels on several aspects of diesel engine characteristics, particularly on hazardous emissions and engine performance (BSFC, effective power, BTE). This study provides an overview of the findings so far and the current situation regarding the use of nano fuels in diesel engines. Additionally, among the group of the most tested fuel additive nanoparticles, the best NMs/base fuel combinations are found based on two criteria that either involves all diesel engine parameters or simply diesel emissions. There are numerous techniques for improving engine performance. Nanoparticles can be used as catalysts in chemical reactions and feedstock retreatment processes to produce biofuels. According to the overall findings, adding nanoparticles significantly reduced the amount of fuel used for brakes by 20% to 23% when compared to biodiesel-diesel blends with and without the addition of alcohol. In addition to improving the combustion process and boosting the brake power by 2.5% to 4%, nanoparticles have a high thermal conductivity. Emission data revealed that while HC, CO, and PM emissions all dramatically decreased in most reviews, NO emissions increased by up to 55%.