Increasing global energy demand, along with economic and environmental issues, have necessitated substituting fossil fuels with biofuels. ABE (acetone-butanol-ethanol mixture), an intermediate product of biobutanol fermentation characterized by low-cost production, has recently emerged as a promising renewable fuel to replace biobutanol (Bu) for engine applications. This study compares ABE and Bu to determine which fuel is superior. To this end, their effects on engine operation and pollutant emissions were investigated. Each biofuel was tested on a research engine under varied loading conditions after being blended with diesel fuel at concentrations of 5, 10, 20, and 30% by volume. The results revealed that the diesel (D)-ABE and diesel-biobutanol (D-Bu) blends experienced dominant premixed combustion; however, deteriorated engine performance somewhat. ABE30 and Bu30 presented the highest increases in fuel consumption (11.67% and 7.89%, respectively), and the highest decreases in thermal efficiency (2.17% and 1.17%, respectively). All fuel blends offered a remarkable concurrent reduction in NO emission and smoke opacity. More specifically, ABE20 provided an average reduction in NO and smoke opacity (41.79% and 49.59%, respectively), as compared to diesel fuel, whereas Bu20 offered a mean reduction in NO and smoke opacity (45.42% and 54.98%, respectively). Collectively, results revealed that Bu20 and its counterpart ABE20 could be the most suitable candidates among the tested fuels. Considering ABE’s lower cost and less energy intensity production process than Bu, ABE20, which is compatible with existing engine technology and improves NOX-PM trade-off with a slight sacrifice in engine performance, emerges as a most promising biofuel.