This research article intends to discuss on the role and effects of dispersing solution combustion derived magnesia nanoflakes (~17 nm) within the biodiesel-diesel blends and pure diesel termed as nanofuels, in order to investigate the functional and pollutant emissions of a single-cylinder, electrically loaded, water-cooled diesel engine. The fuels focussed in this study are a blend of palm oil biodiesel and regular diesel dispersed with 50 ppm magnesia nanoflakes, and a pure diesel dispersed with 50 ppm magnesia nanoflakes. These fuels are compared with regular diesel which is considered as the base reference fuel, as well as with the biodiesel-diesel blend. From the experimental measurements, we inferred that the fuel density, viscous nature, and calorific value enhanced with the addition of nanoflakes. As for the engine performance attributes, the brake specific fuel consumption (BSFC) is lessened by 3.08% and 2.88% for particle dispersed biodiesel-diesel blend and particle dispersed diesel, respectively, whereas the brake thermal efficiency (BTE) enhances by 5.04% for particle dispersed biodiesel-diesel blend and 2.74% for particle dispersed diesel. With reference to emission, the unburnt hydrocarbon (UHC), white damp (CO), particulate exhaust or smoke, and the nitrogen oxides (NOx) are reduced by 9.51%, 18.71%, 13.64%, and 5.63%, respectively for particle dispersed biodiesel-diesel blend and 10.35%, 16.54%, 13.64%, 19.47%, and 4.70%, respectively for particle dispersed diesel.