In this paper, emission and performance characteristics of diesel fuel-engine was investigated using blending of diesel with bio diesel under steady state. Rape-seed oil was used as biodiesel and blended in diesel with different proportions of 10%, 20% and 30% by volume. The engine used in experiment was single cylinder 4-stroke diesel fuel-engine having water cooling system. Result shows that BTE decreases with more addition of bio-diesel in % fraction. For 10% blend, BTE of engine is almost same compared to diesel. The emission characteristics were remarkably improved by increasing volume fraction of rape seed oil except NOx emission. NOx emission was found maximum for 30% diesel-bio diesel blend.