Abstract Fuel crisis because of dramatic increase in vehicular population and environmental concerns have renewed interest of scientific community to look for alternative fuels of bio-origin such as vegetable oils. Vegetable oils can be produced from forests, vegetable oil crops, and oil bearing biomass materials. Non-edible vegetable oils such as linseed oil, mahua oil, rice bran oil, etc. are potentially effective diesel substitute. Vegetable oils have high-energy content. This study was carried out to investigate the performance and emission characteristics of linseed oil, mahua oil, rice bran oil and linseed oil methyl ester (LOME), in a stationary single cylinder, four-stroke diesel engine and compare it with mineral diesel. The linseed oil, mahua oil, rice bran oil and LOME were blended with diesel in different proportions. Baseline data for diesel fuel was collected. Engine tests were performed using all these blends of linseed, mahua, rice bran, and LOME. Straight vegetable oils posed operational and durability problems when subjected to long-term usage in CI engine. These problems are attributed to high viscosity, low volatility and polyunsaturated character of vegetable oils. However, these problems were not observed for LOME blends. Hence, process of transesterification is found to be an effective method of reducing vegetable oil viscosity and eliminating operational and durability problems. Economic analysis was also done in this study and it is found that use of vegetable oil and its derivative as diesel fuel substitutes has almost similar cost as that of mineral diesel.