Biodiesel is an oil produced from vegetable oils or animal fats. Peanut is one of the vegetable that can be used to produce biodiesel due to its high vegetable oil content. This research was conducted to investigate fatty acid characteristics of biodiesel produced from peanut and perfomance of a diesel engine which is fueled by mixture of peanut biodiesel and diesel fuel. Biodiesel was produced by some processes namely degumming, free fatty acid content testing, esterification and transesterification. It was produced 1450 ml biodiesel per 10 kg peanuts. Gas chromatography-mass spectrometry device was used to determine fatty acid content of peanut biodiesel which consists of 52.77% of oleic acid, 16.59% of palmitic acid and 10.63% of behenic acid, respectively. Four mixtures of peanut biodiesel and diesel fuel were created, namely B0 (pure diesel fuel) , B5, B10, B20 where index number is percentage of biodiesel in the mixture. These mixtures were applied to fuel an engine diesel to observe engine perfomances with variation of load and speed on engine. The best engine perfomance result from experiments was found using B20 with spesific fuel consumption (SFC) value is 0.175 kg/kWh at 30 psi of load and 1250 rpm engine speed, the air-fuel ratio (AFR) is 15,26 at 20 psi of load and 1500 rpm engine speed and termal eficiency is 46.37 percent at 30 of load and 1250 rpm engine speed.