This paper evaluates the novel use of cashew nut shell oil (CNSO) as an alternative fuel for diesel. Biodiesel is produced free from environment, and different types of vegetable oils and animal fats. It has highly oxygenated, non-toxic, sulfur free.The renewable fuel that can be adoption in diesel engines without any change. Direct injection diesel engine have been experimentally examine with CNSO methyl esters and its blends (C10, C20 and C30) with diesel fuel. Engine performance parameters namely Brake specific fuel consumption, Brake thermal efficiency, combustion and exhaust emissions of CO, HC,CO2, NOx and smoke density were determined for wide range of loading conditions and at constant engine speed of 1500 rpm. The result denotes that there is a slight decrease in brake thermal efficiency and increase in specific fuel consumption for all the blended fuels when compared to the base fuel. The substantial reduction in carbon monoxide, unburned hydrocarbon and smoke density were recorded for all the blended fuels as well as with neat biodiesel and slightly increased with base fuel. But, in the case of oxides of nitrogen, there is a slight increase for all the blended fuels and with neat biodiesel when compared to diesel fuel.