To reduce carbon dioxide emission and to relieve the demand of fossil fuels, ethanol is regarded as one of the most promising alternative fuels for gasoline. Recently, using ethanol in the state-of-the-art gasoline engine, direct-injection spark-ignition (DISI) engine, has become more attention by researchers due to less knowledge of the ignition and combustion processes in that engine.In this study, different ethanol-gasoline blended fuels, E0 (100% gasoline), E85 (85% ethanol and 15% gasoline mixed in volume basis) and E100 (100% ethanol) were injected by a valve-covered-orifice (VCO) hole-type nozzle. The experimental environment was set to the condition similar with the near top dead center (TDC) in DISI engine. The high-speed imaging of shadowgraph, OH* chemiluminescence and flame natural luminosity were used to clarify the characteristics of the ignition process, flame development and propagation. Results revealed that the flame propagation was directed towards the downstream of spray but not the upstream where the local mixture became diluted. In comparison to the pure gasoline, adding ethanol increased sensitivity to the spark energy. The good burn showed a fast flame growth and larger flame radius. While the poor combustion revealed a long-narrow flame shape and inferior development of the flame radius. Also, the E85 and E100 demonstrated a moderate natural luminosity or nearly transparent-like appearance. Different ignition position and timing were investigated in this study. The ethanol-gasoline blend showed a potential favorable combustion when the fuel was ignited at advanced timing and the middle to downstream of spray.