The lubrication phenomenon is used to reduce friction and wear between two rubbed surfaces, such as in engine and cutting processes. Different oils such as mineral oil and synthetic lubricant are being used for this purpose. With the passage of time, the demand of energy will get higher and natural resources and mineral lubricants will be diminished. Furthermore, biodegradation of mineral oil is too slow, and it remains on the surface of earth for a long period of time, creating atmospheric pollution. To overcome this problem, bio lubricants are being used to reduce wear and friction due to their high biodegradability. In order to increase the lubrication capacity of castor oil, a 1 wt. % concentration of MoS2 nanoparticles was added to the base oil. Moreover, to stabilize the additives, 2 wt. % gum arabic and 1 wt. % Oleic acid (OA) were also added. Then, multiple tests, such as of physicochemical properties, Fourier transform infrared (FTIR), and atomic absorption spectroscopy (AAS) of synthetic lubricant and conventional lubricant, were carried out before and after the operational running of 100 h on the diesel engine for each lubricant at 75% throttle, 2200 rpm, and 50% of total load. The results show that the behavior of newly prepared MoS2-based synthetic lubricant possessed higher characteristics in some physicochemical properties and was marginally lacking in other properties compared to shell lubricant. The flash point and specific gravity of synthetic lubricant were decreased compared to shell oil, with relative decreases of 0.27% and 1.15%, respectively. Ash and kinematic viscosity of 40 °C had a relative increase of 4.17% and 1.61%, respectively, and at a kinematic viscosity of 100 °C, the pour points and total base number (TBN) were relatively increased at 1.09%, 6.02%, and 1.38%, respectively, with respect to the properties of the shell lubricant. Moreover, this analysis evaluated that the reduction of wear and tear in synthetic lubricant regarding chromium (Cr), copper (Cu), and iron (Fe) was decreased by 21.12%, 3.39%, and 0.96%, respectively, but in the case of aluminum (Al) the wear and tear was marginally increased, at 1.17%, compared to shell lubricant. In the case of calcium (Ca) and zinc (Zn), the concentration was decreased by 3.59% and 17.41%, respectively. The FTIR analysis shows that all the peaks of the synthetic lubricant and shell lubricant were overlapping each other in the first three regions of the mid-IR spectra from 4000 to 1500 cm−1 and had the same functional groups—hydroxyl stretch (O-H), alkanes (C-H), carbonyls (C=O), aromatic amines (C-N), and alkyl halides (C-Br)—which were attached but fluctuating in the fingerprint region. The results show that shell lubricant can be replaced with MoS2-based synthetic lubricant because the latter has superior friction reduction and load-bearing capability and can compete favorably with commercial shell oil in wear protection when additivated with MoS2-based nanoparticles, and hence can be a good alternative for diesel engine oil.