Diesel fuel is necessary for farming, transport, and industrialized sector. It contributes to the wealth of the universal economy while it is widely used due to having higher flexibility, combustion efficiency, consistency and handling facilities. However, emissions from fossil fuel are considered as the main source of environmental pollution. Thus, it becomes necessary to reduce emission by improving the performance of the engines. Recently the addition of catalytic material like nanoparticles to diesel proves to be a hopeful solution to reduce emission without much modification of the existing engine design. In the present study, the influence of nanoparticles doped with diesel on the performance and emission characteristics are carried out in a naturally aspirated, single-cylinder, four-stroke, water-cooled, 3.7 kW, direct-injection compression-ignition engine is coupled with eddy current dynamometer and high-speed data acquisition system. Cerium Oxide nanoparticles are selected as the best oxygen boosting catalytic nanoparticle and it is prepared by the sol-gel process. Nanoparticles, then doped with diesel with the help of an Ultrasonicator with different molar concentrations (5 ppm, 7.5 ppm, 10 ppm, 15 ppm). Fuel properties of nano doped fuel samples are tested and presented in this paper. The DI CI engine experimental results were found to be brake thermal efficiency is increased by 3.6% by simultaneously reducing fuel consumption by 3.63% and also harmful environmental pollution like carbon monoxide, unburned hydrocarbon, carbon dioxide, and smoke level are decreased by 9.11%, 6.3%, 3.12%, and 12.6% respectively compared to pure diesel. It may be due to the enhanced surface to volume ratio, catalytic activity and improving the mixing rate of fuel and air in the combustion chamber.