Ethanol diesel blends are one of the best alternative liquid fuels available to replace diesel alone to fuel compression ignition engines. This study attempts a novel co-solvent (recycled waste engine oil) to utilise ethanol-diesel blends. Researchers found that up to 25% of ethanol addition into diesel produced better results while fueled in a diesel engine. This study considered 25% ethanol and 75% diesel as base fuel and the recycled waste engine oil was added in various proportions (from 0% to 50% in increments of 5%) to improve the stability at different temperatures (350 C to 50C). Prepared blends were tested for essential properties as per ASTM standards. The results indicated that the addition of recycled waste engine oil significantly increased the cetane number, energy content, kinematic viscosity, density and flash point into ethanol-diesel blends. Also, the properties of the blend containing 20% of recycled waste engine oil along with the base blend were found closer to that of diesel. This blend was tested in diesel engine for various load conditions for combustion, performance and emissions characteristics under optimal operating parameters (nozzle opening pressure 210 bar, fuel injection timing 290 before top dead centre and compression ratio19:1) arrived by using L9 orthogonal array and Taghuchi method. Results depicted that the in-cylinder peak pressure, ignition delay, peak heat release rate, emissions of oxides of nitrogen and smoke produced by this blend were found closer to that of diesel. However, this blend produced slightly higher hydrocarbon and carbon monoxide emissions in comparison to that of diesel. Keywords: recycled waste engine oil, diesel ethanol blends, compression ignition engine,