In this experimental study, combustion, performance & emission characteristics of a single cylinder D.I. diesel engine is analyzed using lemon grass oil and diesel blend B20. The alumina (Al2O3) nano-particles of 10, 20 and 30 parts per million (B20A10, B20A20, B20A30) are assorted with prepared fuel blend through an ultrasonicator which would help to fetch an unvarying suspension of nano-particles over the blend fuel. SEM analysis and X-ray diffraction have been done for the alumina nano-particles to test the size of the particles that are blended to the bio-fuel blends. The chemical reactivity and rate of mixing are better though the characteristics of nano-particles exhibit high exterior area/capacity ratio during combustion that ultimately results in good characteristics of a diesel engine. Among test fuels, B20A20 shows healthier performance both in relationships of efficiency & emissions such as Nitrous oxide (NOx), hydrocarbon (HC), Carbon monoxide (CO), and Smoke. The ŋBTE for fuel B20A20 is significantly improved by 11.5% when it is compared to the fuel B100. The HC emission is decreased by 40%, CO emission reduced by 6%, NOx emission decreased by 31% and smoke emission reduced by 39% when it is compared to the pure bio-fuel (B100). It is seen clearly that the blending of bio-fuel at the proportion of B20 in the diesel fuel has increased the performance and reduced HC, CO and smoke emission owing to the increase in NOx emission due to better combustion characteristics. From this investigation, adding alumina nano-particles has improved combustion quality showing better performance and shown reduced NOx, CO, HC & smoke in comparison to neat diesel and bio-fuels.