• Ternary blends can slightly increase BTE as compared to diesel fuel. • Coefficient of variation of maximum cylinder pressure and IMEP were lower for ternary blends. • Ternary blends have lower heat transfer rate during the initial combustion process. • Ternary blends can reduce large sized particle number concentration as compared to diesel fuel. • Soot/NOx trade-off can be overcome with suitable EGR rates and ternary blends. This research aims to investigate the effect of EGR (exhaust gas recirculation) rate (10% and 20%) on the performance, emission and combustion characteristics of common rail direct injection (CRDI) diesel engine with double injection strategy, using pure diesel fuel (D100) and three ternary blends consisted of diesel, palm oil and ethanol (D xx P xx E xx , xx was the volume fraction). Experimental results showed that the brake specific fuel consumption (BSFC) of the ternary blends were higher, and the brake thermal efficiency (BTE) was almost identical when compared with D100. Application of EGR increased the BSFC and reduced the BTE slightly. The ignition delays (IDs) of D60P30E10 and D50P40E10 were shorter, but that of D40P30E30 was longer than that of D100. At low engine load, the peak cylinder pressure and peak of heat release rate (HRR) of D40P30E30 were highest, and those of D100 were lowest. At high engine load, the peak cylinder pressure of D100 was highest, that of D60P30E10 was lowest, and the peaks of HRR were almost identical for all test fuels. Ternary blends presented slightly higher cylinder temperature than that of D100. All peaks mentioned above were reduced with the EGR rate increase. D100 had more frictional and pumping losses and higher heat transfer rate during the initial combustion process. EGR led to lower heat transfer rate due to the lower combustion temperature. D100 showed lower coefficient of variation (COV) of indicated mean effective pressure (IMEP) and maximum cylinder pressure (Pmax) at low engine load, but the ternary blends did at high engine loads. NOx emissions were almost identical for all test fuels, and reduced with the EGR rate increase. HC emissions were slightly decreased with the content of ethanol and palm oil in ternary blends, and increased with the rise of EGR rate. All sized of particle number concentration (PNC) was evidently reduced with the addition of ethanol and palm oil in ternary blends, and EGR had little influence on the PNC of D50P40E10 and D40P30E10. It was concluded that D50P40E10 and D40P30E10 could be used to reduce NOx and soot emissions simultaneously in a CRDI diesel engine with double injection strategy when 20% EGR was applied, with a slight cost of performance.