This article is a study of Hydrotreated Vegetable Oil and Butanol Fuel blends, which are mixed in three different proportions (HVOB5, HVOB10 and HVOB20), and the comparison of their combustion (in-cylinder pressure, pressure rise and ROHR), performance (fuel consumption, BSFC and BTE) and emission (CO2, NOX, HC and Smoke) characteristics with those of fossil diesel fuel. In the wake of finding an alternative fuel that requires little to zero modifications to the existing IC engines, it is necessary to account for the necessity of matching the efficiency of conventional fuels as well as greatly reducing its exhaust emissions. As a result of transesterification, HVO is found to have better stability and higher CN compared to other biofuels. It is termed a “renewable diesel” due to its ability to reduce emissions while maintaining efficiency. HVO as a fuel has higher cost efficiency, and for a more stable oxygen content in the fuel, an alcohol substitute is needed. Butanol, which has a considerable advantage over other alcohols due to its higher density, viscosity and CN, is selected. HVOB5 and HVOB10 are found to match diesel fuel in terms of fuel consumption while having a ~1% lesser efficiency. In terms of emissions, all the fuel mixtures including HVO100 are found to have ~4–5% lesser CO2, ~10–15% lesser NOX and a ~25–45% reduction in smoke levels.