The present study deals with the influence of hybrid nanoparticles dispersed in ternary fuel mixtures on the evaluation of the performance and emission characteristics of a single cylinder diesel engine. The fuel blend consists of 70% diesel, 20% Madhuca longifolia biodiesel, and 10% ethanol (by volume). The hybrid nanoparticles of ferric chloride (FeCl3) and graphene nanoparticles were then added to this ternary fuel mixture in different proportions, namely 50 mg/L and 75 mg/L, together with the surfactant and the dispersant in a ratio of 1:1. Moreover, the experiments were conducted on a diesel engine to evaluate the performance and emission parameters by varying different fuel samples, different loads (3, 6, 9, and 12 kgf) and injection pressures (i.e. 200, 225,and 250 bar). In addition, the Taguchi-Grey relation analysis was used for optimization, and the input parameters are fuel samples, loads and injection pressures. Experimental performance metrics, including brake specific fuel consumption (BSFC) and brake thermal efficiency (BTE), were improved when hybrid nanoparticles were added to the ternary fuel blend compared to diesel. At the same time, smoke opacity, nitrogen oxides (NOx), unburned hydrocarbons (UHC) and carbon monoxide (CO) emissions were reduced. Increasing the injection pressure also led to positive results, apart from NOx. Both performance and emissions were better for hybrid nanofuel based on surfactants and dispersants than for the base fuel, and it performed better of all dispersant-added nanofuels. The better results were obtained with D70B20E10NPs75QPAN75 mg/L than with the other fuel samples. The maximum BTE and lowest BSFC are 33.26% and 0.206 kg/kWh, while the minimized CO, UHC, NOx and smoke values at full load are 0.019%, 21 ppm, 833 ppm and 36.25%, respectively, at full load and injection pressure of 250 bar. By combining experimental investigations with the Taguchi -Grey method, a comprehensive and rapid assessment of the effects on the performance and emission characteristics of diesel engines was achieved.