Spark assistance along with oxygenated components addition is a promising method to achieve stable compression ignition, high thermal efficiency and low particle emission. To this end, ethanol blended with non-oxygenated gasoline was fueled to an engine working with spark-ignition to compression-ignition (SICI) mode under air dilution and exhaust-diluted conditions. The effects of ethanol addition on engine performance including combustion characteristics, fuel economy, particle number (PN) emissions, were studied in two categories: changing research octane number (RON) by varying ethanol content and maintaining RON by changing fuel type. The results showed that ethanol addition by splash blending suppressed knock tendency, and the knock intensity could be lowered by up to 65–75% with increasing ethanol content. However, when maintaining the same RON, the ethanol-gasoline blend exhibited higher knock intensity than pure gasoline due to synergistic effects between ethanol and aromatics on auto-ignition. Compared to pure spark ignition with high-RON gasolines, using ethanol-gasoline blends under SICI could reduce the minimum fuel consumption rate by up to 25 g/(kW·h). To characterize the high-efficiency cycles under SICI, two dimensionless parameters were proposed by considering the ratios of heat release amount and duration between the flame propagation stage and auto-ignition stage. The two parameters showed good exponential correlation. As for emissions, blending ethanol could basically reduce PN emissions under SICI mode except for the cases with significant increase in nucleation particles, such as those with high knock intensity under stoichiometric condition and poor combustion quality under heavily exhaust-diluted conditions. The total PN reduction by blending ethanol is mainly due to the decrease of accumulation mode particles, during the stage of flame propagation rather than auto-ignition. Blending ethanol into non-oxygenated gasoline will directly increase unburned hydrocarbons and nitrogen oxides due to the low auto-ignition propensity of ethanol under stoichiometric or moderately lean conditions according to the temperature-pressure trajectory. Therefore, a dedicated combustion system with higher compression ratio and lean-boosted mixture is required to enhance ethanol's reactivity and achieve better fuel economy along with low PN emission for diluted SICI combustion.