With rising fuel consumption across road transportation, there is growing interest in expanding the market share of renewable fuels, such as ethanol. Ethanol can be produced from raw materials from various starch-rich plants. In CI engines, ethanol cannot be utilized on its own, largely due to its low cetane number. In this study, a constant volume combustion chamber (CVCC) is employed to investigate the effects of adding ethanol in diesel with different proportions (10%, 20%, 30% v/v) on the spray and combustion characteristics. Optical techniques, such as shadowgraph and direct photography using high-speed imaging methods, were employed to reveal the spray and flame development process. This study examines the effects of varying fuel injection pressures (50, 80, and 110 MPa) and ambient pressures (1.5 and 3 MPa) on diesel-ethanol (DE) fuel blends. The study emphasizes the impact of DE blending ratios on the spray’s macroscopic features, while the microscopic characteristics are investigated through computational fluid dynamics (CFD) simulations to provide a comprehensive analysis of spray behavior under these conditions. The spray experiments are further combined with the flame and combustion characteristics of the blended fuel under different temperatures (800, 1000K), oxygen concentrations (15, 21%), and ambient density (15 kg/m3). It is revealed that the increase in ethanol content in diesel alters the fuel's physicochemical properties, resulting in a reduction not only in kinematic viscosity but also surface tension, thereby modifying the spray's behavior. Consequently, the average SPL is reduced, while a broader SCA is observed. Additionally, the Sauter Mean Diameter decreases with an increased ethanol ratio in diesel which indicates an improved atomization process compared to pure diesel fuel. In the case of spray combustion characteristics and the flame development process, the results demonstrate that the ethanol-blended spray flame has an unstable flame boundary, displaying multiple wrinkles at the outermost flame edge. Moreover, as the ethanol proportion increases, the peak combustion pressure experiences a slight drop under most test conditions. However, higher ambient temperature and oxygen concentration could significantly reduce the ignition delay. A thorough discussion of the mechanism underlying these events will be provided.