In order to directly use rapeseed oil in diesel engines and reduce energy consumption in fuel preparation process, the density and viscosity of rapeseed oil have to be reduced and fuel properties can be adjusted by adding low-carbon alcohols (methanol/ethanol). However, the mutual solubility of two fuels needs to be improved by adding co-solvents. Therefore, three butanol isomers including n-butanol, sec-butanol, iso-butanol, tetrahydrofuran (THF) and polyoxymethylene dimethyl-ethers (PODE) were selected to study the solubilization ability and fuel properties improvement in the blends of low-carbon alcohol and rapeseed oil. Results show the position of the phase boundary increases due to low-carbon alcohol dissolved into rapeseed oil with the gradual addition of co-solvent until the appearance of one-phase liquid in both macro and micro observations. Micro-observations also show that, after fully mixing and stabilizing, ethanol disperses rapeseed oil into small droplets at the phase boundary due to its relatively stronger lipophilicity, while the interface of methanol and rapeseed oil is clear and smooth demonstrating the worse mutual solubility. The effect on solubility and viscosity adjustment of THF is the best among all co-solvents. The solubility of PODE is more suitable for ethanol system rather than methanol system by comparison with n-butanol, but its effect on density adjustment is not as good as n-butanol. The solubility of n-butanol is the best among three isomers. Besides, rapeseed oil system needs more co-solvents to keep blending fuel in one-phase than that of soybean oil ternary system. Finally, the suitable alternative fuel system can be prepared according to the fuel requirements of different engines.