Hybrid vehicles have been developed for improving efficiency and the consequent reduction of fossil fuels consumption in the transportation sector. The complexity of such vehicles allows for countless architectures, being one of them the range extender concept, which corresponds to an electrically powered vehicle equipped with a small combustion engine to improve the vehicle range. In the literature there is no current consensus whether range extenders should adopt simple engine technology aiming at cost reduction, or should they incorporate complex systems in order to achieve a remarkable thermal efficiency and low emissions. In the context of exploring the advanced options for range extenders, the combustion characterization is a fundamental step, which provides information on combustion behavior for several fuel types under a wide range of combustion modes. That information can both yield useful insights for engine development and provide combustion datasets for engine simulation. This study proposes the characterization of the flame morphology of hydrous ethanol combustion under port fuel injection mode and mixture dilution with synthetic exhaust gas recirculation (EGR) on a spark ignition, optically accessible engine. Flame natural luminosity was recorded by a high speed camera and their post-processing provided the flame morphology, which was correlated to the in-cylinder pressure data and indicated parameters. The gaseous emissions were measured using FTIR technique, for three engine speed conditions (1500, 2250 and 2500 rpm) and three conditions of EGR dilution (5%, 10% and 15%) besides the baselines conditions with no dilution, under a constant load of 5 bar IMEP. Thermodynamic results indicate that there was no power de-rating with EGR dilution. However, the optical analysis revealed that dilutions rate beyond 10% of EGR led to a slower combustion and lower combustion stability. Specific emissions of NOx, aldehydes and CO were reduced with increasing EGR rates, while the unburned ethanol increased.