Using alternative energy sources is crucial in light of the swift exhaustion of worldwide fossil fuel reserves, a situation worsened by industrialization and population expansion. Incorporating a certain amount of algal bio-oil into the biodiesel production process can improve its long-term sustainability. The use of butyl alcohol (butanol) as a blending enhancer, which mixes biodiesel (BD) and conventional fossil fuel (FD), shows potential for raising the total energy content and improving viscosity qualities. This research primarily focuses on oil extraction from algae and the subsequent production of biodiesel (BD). Five different BM variants were created utilizing B20But30 (BD-50%, BD20%, But-30%), each with different amounts of zinc oxide. The several types of BM considered are B20But30 and B20But30 with ZnO at concentrations ranging from 25 to 100ppm. The results demonstrate that the utilization of B20But30ZnO at different concentrations (100 ppm, 75 ppm, 50 ppm, and 25 ppm) and B20But30 alone lead to improvements in Brake Thermal Efficiency (BTE) by 13%, 12.23%, 10.68%, 5.93%, and 1.53% respectively, compared to the baseline condition of FD (Full Load). The observed exhaust gas temperatures were as follows: 2100C for diesel fuel, 2130C for B20But30 fuel mix, 2160C for B20But30ZnO fuel blend with 25ppm, 2180C for B20But30ZnO fuel blend with 50ppm, 2190C for B20But30ZnO fuel blend with 75ppm, and 2230C for B20But30ZnO fuel blend. Empirical studies have demonstrated that including ZnO in BM decreases NOx, CO2, and SO2 while concurrently increasing the concentration of HC (hydrocarbons). Therefore, it was found that the potential of using micro-algae-based biodiesel, along with butanol and Zinc oxide, as an alternative to traditional fuel in diesel engines showed great promise and practicality.