The threat of fossil fuel depletion and augmented environmental pollution caused by diesel fleets can be curbed by adopting suitable fuel and engine modifications. In the present work, effects of engine speed (r/min), injection timing, injection pressure and compression ratio on performance and emission characteristics of a compression ignition engine were investigated. The ternary test fuel of 65% diesel + 25% bael oil + 10% diethyl ether has been used, where the tests have been conducted at different charge inlet temperature and exhaust gas recirculation. All the experiments were conducted at the trade-off engine load that is 75% engine load. When the diesel engine operating with 320 K charge inlet temperature, brake thermal efficiency has been improved to 28.6%. Meanwhile reduced emission levels of carbon monoxide (0.025%) and hydrocarbon (12.3 ppm) were observed during the engine operation with 320 K charge inlet temperature and compression ratio of 18:1. The oxides of nitrogen have been reduced to 226 ppm at 16:1 compression ratio with 30% exhaust gas recirculation mode.