A large number of research studies have raised global concerns about the rapid depletion of traditional energy sources like petroleum. These fuels, being largely non-renewable, are being consumed at a rate much faster than they can be replenished. This growing imbalance between demand and supply has led to fears that, in the near future, the world could face a serious energy crisis if alternative sources are not developed and adopted in time. The use of alternative fuels plays an important role in lowering harmful emissions, including those that contribute to ozone formation and other toxic pollutants. It is a well-established scientific understanding that the continued combustion of fossil fuels is a key driver of global atmospheric warming. As environmental awareness grows, many individuals across the globe believe that shifting toward cleaner and more sustainable fuel sources is essential for protecting and improving the health of our planet. Extensive research is being conducted to evaluate the compatibility of various alternative fuels—such as rubber seed oil, melon seed oil, sunflower oil, jatropha oil, and waste cooking oil—for use in internal combustion (IC) engines. In light of this, the current study focuses on assessing the feasibility of using watermelon seed oil as a potential alternative fuel. Through the process of transesterification, watermelon seed oil was converted into biodiesel. The study involved testing pure diesel and its blends with biodiesel—namely B10, B20, and B30—to analyze and compare their performance, emission levels, and combustion behavior within a diesel engine setup. Test results indicated that the use of biodiesel led to an increase in brake specific fuel consumption (BSFC) and a slight reduction in brake thermal efficiency (BTE), primarily due to its lower calorific value. Although there was a moderate rise in nitrogen oxides (NOx) and carbon monoxide (CO) emissions, the use of biodiesel and its blends effectively reduced hydrocarbon (HC) and carbon dioxide (CO₂) emissions. Furthermore, combustion analysis revealed that, compared to conventional diesel, biodiesel blends resulted in reduced peak cylinder pressure and a lower heat release rate during the combustion process.