The presented paper addresses two significant issues of the present time. In general, the studies of the effect of synthetic fuels on cavitation formation and cavitation erosion prediction in the nozzle tip of common-rail diesel injectors were addressed. The first problem is plastic waste, which can have a significant negative environmental impact if not treated properly. Most plastic waste has high energy value, so it represents valuable material that can be used in resource recovery to produce various materials. One possible product is synthetic fuel, which can be produced using thermal and catalytic pyrolysis processes. The first issue addressed in the presented paper is the determination of fuel properties since they highly influence the fuel injection process, spray development, combustion, etc. The second is the prediction of cavitation development and cavitation erosion in a common-rail diesel injector when using pyrolytic oils from waste plastic. At first, pyrolytic oils from waste high- and low-density polyethylene were obtained using thermal and catalytic pyrolysis processes. Then, the obtained oils were further characterised. Finally, the properties of the obtained oils were implemented in the ANSYS FLUENT computational program and used in the study of the cavitation phenomena inside an injection nozzle hole. The cavitating flow in FLUENT was calculated using the Mixture Model and Zwart-Gerber-Belamri cavitation model. For the modelling of turbulence, a realisable k–ε model with Enhanced Wall Treatment was used, and an erosion risk indicator was chosen to compare predicted locations of cavitation erosion. The results indicate that the properties of the obtained pyrolytic oils have slightly lower density, surface tension and kinematic viscosity compared to conventional diesel fuel, but these minor differences influence the cavitation phenomenon inside the injection hole. The occurrence of cavitation is advanced when pyrolytic oils are used, and the length of cavitation structures is greater. This further influences the shift of the area of cavitation erosion prediction closer to the nozzle exit and increases its magnitude up to 26% compared to diesel fuel. All these differences have the potential to further influence the spray break-up process, combustion process and emission formation inside the combustion chamber.