Ever growing population and increased vehicles have resulted in higher atmospheric concentration of the greenhouse gases, such as carbon dioxide and methane, thus increasing our planet’s average temperature leading to irreversible climate changes, which has led to increasingly demanding and stricter legislations on pollutant emission and CO2, as well as fuel economy targets for the automotive industry. As a result, a great deal of efforts and resources has been spent on the research and development of high efficiency and low emission engines for automotive applications in the attempt to reduce greenhouse gas emissions and levels of nitrogen oxides and soot emissions, which affect the air quality. This research has developed strategies to investigate the combustion characteristics, engine performance and exhaust emission of diesel–gasoline dual-fuel operation in a Ricardo Hydra single-cylinder optical engine running at 1200 r/min, equipped with a high-pressure common rail injection system for diesel fuel delivery, and a port fuel injection system, designed and manufactured by the author, for gasoline fuel delivery, in order to allow for dual-fuel operations. In-cylinder pressure measurement is used for calculating all engine parameters, heat release rate and efficiency. In addition to the thermodynamic analysis of the combustion parameters, high-speed imaging of spray and combustion chemiluminescence was used for the optical analysis of the effect of the above-mentioned parameters on auto-ignition and combustion processes. Effects of different substitution ratios and diesel injection strategies at low engine loads were studied when the total fuel energy was kept constant. The three main substitution ratios used in this study include 45%, 60% and 75%, which also indicates the amount of fuel energy from port-injected gasoline, where the rest is provided by the direct injection of diesel. Depending on the testing conditions, such as injection strategy and intake conditions, some dual-fuel operations were able to deliver high efficiency and improved emissions compared to that of a pure diesel engine operation, with the diesel–gasoline operation offering more consistency in improved thermal efficiency. The optical analysis of the combustion illustrates the main difference in the flame propagation, distribution and quality for each substitution percentage, as well as the condition under examination. It was observed that combustions with higher concentration of diesel fuel having more diffusion-like combustion, especially with diesel injection timings closer to the top dead centre, where there is less time for the two fuel and air to properly mix before combustion occurs, resulted in higher temperature and levels of NOx due to the pockets of high diesel concentrations within the combustion chamber, whereas higher concentration of gasoline, especially at earlier diesel injection timings, resulted in more homogeneous fuel mixture and thus lower combustion temperatures. In other words, when the gasoline substitution ratio is lower, optimised start of injection is advanced further, so that richer diesel mixture needs longer ignition delay to have proper combustion timing, and combustion is milder and peak heat release rate is slightly lower due to less local diesel rich mixture area by means of earlier injection timing, and in terms of emissions, lower gasoline substitution ratio, decreases NOx with more homogeneous diesel mixture, and same can be said for total hydrocarbon. Performing the thermodynamics testing with an all metal piston alongside the optical testing allowed for the confirmation of these outcomes. This study not only delivers an insight to the benefits of dual-fuel engine operation, it also represents the benefits of optical engines in providing better understanding of engine operation and ways of improving it.