The ethanol fuel sold in Brazil, which is seen as an option that represents less polluting gases emitted into the atmosphere, goes through a period where its economic viability does not compensate its use against the alternative coming from nonrenewable sources. It is known that part of the cost associated with commercial ethanol is due to its purification through distillation, which decreases the water percentage in the final composition. Aiming to evaluate alternatives to reduce the final cost of the fuel, a comparison was made between the burning results of hydrous ethanol, with up to 5% of water by volume, and the wet ethanol, with 30% water by volume, in an Otto cycle engine, operating with a fixed speed of 1800 RPM and seeking the maximum brake torque in each test. Thus, these biofuels were tested in different compression ratios of 12.5: 1, 13.5: 1 and 14.5: 1, in order to evaluate the overall efficiency of the engine and the influence of this variable on the emissions of CO, NOx and unburned hydrocarbons. The results have shown that water increase in fuel composition, and consequent reduction of the combustion chamber temperature, led to a lost in indicated fuel conversion efficiency of wet ethanol when compared to commercial ethanol only in the lowest compression ratio, showing higher efficiency than the hydrous fuel in the other conditions. Meanwhile, volumetric efficiency shows a slight variation for the fuel with the higher percentage of water and combustion efficiency tends to improve with the increase in compression ratio. In addition, the lower temperature during combustion causes ethanol with 30% water by volume to emit less NOx and CO when compared to hydrous ethanol, while unburned hydrocarbon emissions increase due to the consequent worsening in fuel combustion.