n-Octanol with its high energy density and high cetane number has similar fuel properties as diesel fuel, and is thus considered an excellent choice for alcohol fuels as a substitute for diesel. This study focused on the effects of exhaust gas recirculation (EGR) combined with the addition of n-octanol on the performance, emissions, and particulate matter (PM) of a direct injection diesel engine. The results show that the curves of the in-cylinder pressure of n-octanol/diesel blends nearly overlap those of pure diesel fuel under the test conditions. At a low EGR ratio, the brake thermal efficiency of n-octanol/diesel blends is higher than that of diesel fuel. With an increase in the EGR ratio, the results show that nitrogen oxide (NOX) emissions decrease, whereas carbon monoxide (CO) and soot emissions significantly increase. However, the use of n-octanol/diesel blends can inhibit the increase in CO and soot emissions appreciably. In addition, with an increase in n-octanol content in the blends, the number concentration of particles on the particle size distribution decreases gradually. To summarize, a simultaneous reduction in NOX and PM emissions under a combined operation of small EGR ratios and n-octanol blends can be realized, thereby improving the brake thermal efficiency.