Due to fast decrease of crude oil reserves, the biodiesel derived from various non-edible feedstocks has become increasingly popular in most of the developing countries. Amongst which the biodiesel derived from neem oil has already proved as potential alternative fuel for Compression Ignition (CI) engine. However, the studies which investigate performance and emission characteristics with additives need to be investigated. In the present investigation, the neem oil biodiesel was prepared using acid catalysed esterification followed by trans-esterification process. The performance and emission characteristics of a single cylinder compression ignition engine was carried with propyl gallate (PG) concentration of 0 parts per million (ppm), 250 ppm, 500 ppm and 750 ppm with neem oil biodiesel. The engine performance and emission tests were carried out at a rated speed of 1,500 rpm under different loading conditions. An improved performance and emission characteristics of engine was found with addition of PG as additives in neem oil biodesel.