The increase in fuel prices, along with the lack of petroleum supplies, has led researchers to seek out alternative fuels. In recent years, the concept of transforming waste into a productive source of energy has gained attention. Several forms of agricultural products, chemical reactant, and treated blends have been studied by scientists all over the world over the past few decades. The work’s goal is to determine the effectiveness with using treated transformer oil (TTO) as diesel engine fuel, thus minimizing the environmental issues created by its discharge into open space. This study also aims to capitalise used transformer oil as a renewable fuel source into compression ignition engine, since using waste oils decreases the cost of fuel. The characterization (aniline point, calorific value, density, diesel index, flash point, kinematic viscosity) of treated transformer oil (TTO) was determined and blended with diesel in the proportion of 10% (TTO10), 20% (TTO20), 25% (TTO25), 30% (TTO30), and 40% (TTO40) treated transformer oil. The outcomes are evaluated in comparison to the same diesel engine’s operation. According to the findings of the study, blends of treated transformer oil and diesel fuel may be a best choice for diesel engines since they have the same calorific value as diesel fuel. The brake thermal efficiency of blends containing up to 20% TTO is greater compared to diesel fuel. It lowers as a proportion of treated transformer oil increases and increases as the load increases. Furthermore, when the fraction of TTO in blends grows, brake specific fuel economy (BSFC) declines with load.