Biodiesel has been widely accepted as an alternative for fossil-derived diesel fuel for use in compression ignition (CI) engines. Poor oxidative stability and cold flow properties restrict the use of biodiesel beyond current B20 blend levels (20% biodiesel in 80% ULSD) for vehicle applications. Maintaining the properties of B20 as specified by ASTM D7476-08 is important because, once out of spec, B20 may cause injector coke formation, fuel filter plugging, increased exhaust emissions, and overall loss of engine performance. While the properties of fresh B20 may be within the specifications, under engine operating and longer storage conditions B20 could deteriorate. In a diesel engine, the fuel that goes to the injector and does not enter the cylinder is recycled back to the fuel tank. The re-circulated fuel returns to the fuel tank at an elevate temperature, which can cause thermal oxidation. In this study, several critical fuel properties such as the oxidative stability, cetane number, viscosity, cold flow properties, and higher heating values of a B20 fuel on a CI engine, in a stationary power generator with a 200 gallon fuel tank, were measured as a function of engine run time. These property changes were compared with fuel stored in a commercial storage tank. The oxidative stability decreased by 50% within 60 hours of engine run time while the viscosity, cetane number, and acid number increased with time. B20 in the storage tank did not show significant fuel degradation. The thermal degradation of B20 is due to several factors, such as high temperature, depletion of reactivity of antioxidants, and dissolution of metals from engine parts at high temperatures. These property changes correlate with compositional changes. The effects of this fuel deterioration on the thermal efficiency and fuel consumption were also studied. Significant changes of thermal efficiency and fuel consumption were not observed during 60 hours of engine operation (without refueling the 200 gallon fuel tank). These results will help understand the effects of oxidized biodiesel on engine performance and methods of minimizing degradation of B20 under engine operation conditions.