AbstractA low‐cost, high‐performance alternative fuel to traditional fossil fuels is required due to rising energy demand, fossil fuel depletion, and rising prices. In this case, one of the green fuels could be synthesized using transesterification from waste‐fried edible oil (WFEO). The current study deals with neat diesel (D100) and waste‐fried edible oil biodiesel (B100) as the baseline fuels. By volume, a binary blend of 50% diesel and 50% WFEO biodiesel was prepared. The biodiesel/methanol/diesel mixture was considered a ternary blend under two different ternary ratios, such as B40M10D50 and B30M20D50, respectively. The fuel characterization and the rheological study were performed for all the fuel blends as per the ASTM standards. According to engine experimental results, the B30M20D50 blend has 25.42% higher brake thermal efficiency (BTE) than B100 but 3.4% lower than D100 at full load due to the higher methanol percentage. When compared with D100, adding 20% methanol to the ternary blend reduced brake‐specific fuel consumption (BSFC) by 33.34%. Both ternary blends increased NOx emissions by 27.38% and 22.97% compared to D100 but decreased them by 14.23% and 18.68% compared to B100. Both ternary blends produced 0.4 and 0.36 kg/kWh at lower loads, while the D100 and B100 produced 0.46 and 0.42 kg/kWh. Finally, the entropy‐weighted technique for order preference by similarity to the ideal solution (TOPSIS) multi‐criteria decision‐making method was used to determine the best blend for engine performance and emissions. The entropy‐weighted TOPSIS technique likewise found that a B30M20D50 ternary blend with 75% loading had the lowest emissions and best performance.