In order to better evaluate the effects of ethanol/diesel blends on engine combustion and emission characteristics, we developed an engine cylinder model using the software CONVERGE combined with the program CHEMKIN. The model was validated experimentally. A modified chemical kinetic mechanism was used to calculate the combustion process of diesel fuel and ethanol for the diesel engine, including 154 reactions and 68 species. Furthermore, the influence of different ethanol proportions on diesel engine combustion and emission characteristics, including power, brake specific fuel consumption, brake thermal efficiency, cylinder pressure, cylinder temperature, nitrogen oxide (NOx), carbon monoxide (CO), and soot emissions, was also investigated. Our results showed that cylinder pressure and temperature increased with increased ethanol content. When the ethanol content increased to 20% at 100% load, the cylinder pressure increased by 0.46%, and the thermal efficiency increased by 3.63%. However, due to the lower calorific value of ethanol, the power decreased by 4.12%, and the brake specific fuel consumption increased by 4.23%. In addition, the ethanol/diesel blends significantly reduced CO and soot emissions. Compared with diesel, soot and CO emissions from the D80E20 at 100% load reduced by 63.25% and 17.24%, respectively. However, NOx emission increased by 1.39%.