Abstract: This experimental investigation focuses on finding out an alternative fuel for direct injection diesel engines without any modification. Experiments have been conducted on a single cylinder, water cooled diesel engine to carry out the tests on performance and emission characteristics with various blends of eucalyptus oil. Initially properties of chosen oil have been compared with those of other biodiesel fuels which were already tested. The properties of the eucalyptus oil are closer to diesel and comparatively better than other biodiesel fuels. Further tests have been carried out for confirmation. The performance parameters chosen are brake thermal efficiency, specific energy consumption, pressure angle diagram and heat release rate. The emission parameters chosen are unburnt hydrocarbon emission, carbon monoxide emission, carbon dioxide, smoke opacity and Oxides of Nitrogen (NOx) emission. As the overall experimental results and regulated emission parameters showed appreciable results, eucalyptus oil may be a futuristic biodiesel fuel.