The steady rise in energy consumption, as well as the environmental issues resulting from greater use of diesel fuel, are both alarming. The most effective option for reducing diesel fuel consumption and greenhouse gas emissions is to substitute diesel fuel with biodiesel. These fuels have a longer life cycle and they have a remarkable effect on the global greenhouse phenomena Since Lemon Peel Oil (LPO) is naturally available, biodiesel with LPO and diethyl ether (DEE) can be a valuable alternative fuel. Lemon peel oil has been discovered to be a viable, renewable, and environmentally acceptable alternative fuel. There is a lot of variation in emission and performance characteristics with lemon peel oil. Lemon peel oil blends have been found to reduce CO, HC, and smoke emissions. In terms of brake thermal efficiency, lemon peel oil blends outperform diesel fuel. The physical and chemical properties of the extracted lemon peel oil were determined, and they are suitable for use as a diesel fuel additive. To extract the lemon peel oil and blend it with diesel, transesterification is employed. The B5 mixtures (950 ml Diesel Fuel + 35 ml LPO + 15 ml DEE), and B10 mixtures (900 ml Diesel Fuel + 70 ml LPO + 30 ml DEE) contain 30% DEE and 70% LPO, respectively. The performance and emission testing in this study are conducted with a VCR type CI engine using the three fuel alternatives listed above. The experiments were carried out with the new blend in a variety of engine running circumstances, and the B5 mixture has a 0.6 to 2% greater brake thermal efficiency than diesel fuel.