Neat mahua oil poses some problems when subjected to prolonged usage in CI engine. The transesterification of mahua oil can reduce these problems. The use of biodiesel fuel as substitute for conventional petroleum fuel in heavy-duty diesel engine is receiving an increasing amount of attention. This interest is based on the properties of bio-diesel including the fact that it is produced from a renewable resource, its biodegradability and potential to exhaust emissions. A Cummins 6BTA 5.9 G2- 1, 158 HP rated power, turbocharged, DI, water cooled diesel engine was run on diesel, methyl ester of mahua oil and its blends at constant speed of 1500rpm under variable load conditions. The volumetric blending ratios of biodiesel with conventional diesel fuel were set at 0, 20, 40, 60, and 100. Engine performance (brake specific fuel consumption, brake specific energy consumption, thermal efficiency and exhaust gas temperature) and emissions (CO, HC and NOx) were measured to evaluate and compute the behavior of the diesel engine running on biodiesel. The results indicate that with the increase of biodiesel in the blends CO, HC reduces significantly, fuel consumption and NOx emission of biodiesel increases slightly compared with diesel. Brake specific energy consumption decreases and thermal efficiency of engine slightly increases when operating on 20% biodiesel than that operating on diesel.