This work uses cerium oxide (CeO2) nanoparticles and purified plastic pyrolysis oil (PPO) to create and evaluate nano fuel for four-stroke diesel engines. The objective is to increase engine performance and decrease emissions without altering the engine. PPO is mixed with conventional diesel fuel to form modified diesel fuel, which is then mixed with surfactant-modified CeO2 nanoparticles to produce a special nano fuel. HR-TEM, SEM, EDS, and XRD characterise the characteristics of the modified nanoparticles. A four-stroke diesel engine is used to test the nano fuel in order to assess emission characteristics and engine efficiency. Comparing the recommended procedure to commercial diesel fuel, the findings demonstrate a 16% reduction in pollutants and a 10% improvement in engine efficiency. This is because the oxygen in the nanoparticles makes the fuel purer and more viscous, which enhances burning efficiency. The performance and emission properties of the nano fuel are evaluated using a four-stroke diesel engine. The results show that, when compared to commercial diesel fuel, the suggested approach increases engine efficiency by 10% and decreases emissions by 16%. It also stresses employing nanoparticle additions to improve diesel engine performance without making substantial engine adjustments.