In the last six decades, due to the continuous improvement in environmental legislations and depletion of fossil fuels in the world, IC engine researchers have been vigorously exploring various possibilities of reducing petroleum fuel dependency and emissions of internal combustion (IC) engines. Operating IC engines in low heat rejection (LHR) mode by providing thermal barrier coating (TBC) to some of the engine components is one of the methods to improve thermal efficiency and reduce some of the tailpipe emissions. Yttria stabilized zirconia (YSZ) is a commonly used TBC material in IC engines due to its thermal characteristics. On the other hand, running an engine in a dual-fuel operation by a gaseous fuel gives better and more efficient combustion. In this research work, an attempt was made to study the combined effects of running a compression ignition (CI) engine in dual-fuel operation with LHR mode on its performance, and emissions were investigated. For this purpose, a 4.4 kW, four-stroke, naturally aspirated, single-cylinder, direct injection (DI) diesel engine was converted to run in dual-fuel mode. Two pistons were used in this study; one is uncoated and the other one was coated. The second piston was coated by 300μm thickness with a ceramic composition of ZrO2 and 6-8 wt% Y2O3 ceramic material called as YSZ. A blend of Jatropha methyl ester (JME) with diesel in the respective proportion of 20% and 80% was prepared (JME20) and was used as pilot fuel, and the oxy-hydrogen (HHO) gas was used as inducted fuel for dual-fuel operation. The HHO gas is a carbon-free, hydrogen-based renewable fuel that is produced by the process of water electrolysis in a fabricated wet cell electrolyzer. The results indicated that the YSZ coated piston engine in both the dual-fuel operations (i.e) D100+HHO, and Opt.JME20+HHO showed thermal efficiency higher by about 5.5% and 5.9% compared to that of D100 operation at full load. The same dual-fuel operations also showed a reduction of HC, CO, and smoke irrespective of the engine load. The maximum HC, CO, and smoke emissions were reduced by about 38.2%, 40%, and 20.4% respectively for Opt.JME20+HHO with the YSZ coated piston engine compared to baseline data at full load.