Given the instability in supply and finite nature of fossil fuels, alternative renewable energy sources are continuously investigated throughout the production–distribution-use chain. Within this context, the research presented in this work is focused on using butanol as gasoline replacement in a Direct Injection Spark Ignition engine. The impact of this fuel on the combustion processes was investigated using optical diagnostics and conventional methods in a transparent single cylinder engine. Three different load settings were investigated at fixed engine speed, with combined throttling and mixture strength control. The engine was operated in homogenous charge mode, with commercial gasoline and pure n-butanol fueling. High spatial and temporal resolution visualization was applied in the first phase of the combustion process in order to follow the early flame development for the two fuels. The optical data were completed with conventional measurements of thermodynamic data and pollutants emission at the exhaust. Improved performance was obtained in throttled stoichiometric mode when using the alternative fuel, while at wide open throttle, gasoline featured higher indicated mean effective pressure at both air–fuel ratio settings. These overall findings were correlated to flame characteristics; the alcohol was found to feature more distorted flame contour compared to gasoline, especially in lean conditions. Differences were reduced during throttled stoichiometric operation, confirming that mass transfer processes, along with fuel chemistry and physical properties, exert a significant influence on local phenomena during combustion.