In modern society where fossil fuel prices are increasing and environmental issues are becoming more severe, biodiesel, as a new type of clean fuel, is receiving increasing attention. Biodiesel has the advantages of renewability, environmental friendliness, and good fuel properties, demonstrating broad application prospects. However, the use of biodiesel also faces some challenges, such as higher density and kinematic viscosity, lower calorific value, etc. The application of nanoparticles in biodiesel engines helps to achieve the goal of clean fuel. In terms of fuel characteristics, nanoparticles increase the calorific value, cetane value, and flash point of the fuel, improving combustion efficiency and safety, but increasing density may affect combustion. The use of nanoparticles can promote micro explosions and secondary atomization of fuel, improve combustion characteristics, and increase cylinder pressure, heat release rate, and brake thermal efficiency while reducing fuel consumption. Nanoparticles reduce HC and CO emissions, improve combustion through higher oxygen and reaction area, and reduce incomplete combustion products. On the contrary, nanoparticles also increase CO2 emissions because better combustion conditions promote oxidation reactions. For NOX emissions, some nanoparticles lower the combustion temperature to reduce emissions, while others increase emissions. Comparison shows that all nanoparticles offer varying degrees of improvement in engine performance and emissions, but the improvement provided by TiO2 nanoparticles is significantly better than that of other nanoparticles. In the future, the synergistic effect of multiple nanoparticles should be explored to further improve performance and reduce emissions, achieving effects that cannot be achieved by a single nanoparticle.