Biodiesel is an alternative, eco-friendly and renewable source of energy. It can be produced from a wide range of feedstocks which can be grown in marginal land use. It has drawn more attention to the researchers. In this study, the oil extraction, biodiesel conversion, and physiochemical properties of Macadamia (Macadamia integrifolia) and Grapeseed (Vitis vinifera) biodiesels are presented. The experimental investigation of diesel engine performance, emissions and combustion characteristics were conducted using B5 (5% biodiesel and 95% diesel by volume) and B10 (10% biodiesel and 90% diesel by volume) blends. The engine performance parameters, such as brake power (BP), brake specific fuel consumption (BSFC), and brake thermal efficiency (BTE) have been investigated in this experiment. The emission parameters, for example, carbon monoxide (CO), the ratio of CO2/CO, nitrogen oxide (NOx), hydrocarbon (HC), particulate matter (PM) have been measured during the experiment. Finally, the combustion parameters such as cylinder pressure (CP) were recorded, and heat release rate (HRR) was analysed and compared with that of diesel fuel. The study revealed that the Macadamia biodiesel performed better than Grapeseed biodiesel and behaved closely to that of diesel fuel. A significant reduction of engine emissions was found in the case of Macadamia biodiesel with a minimal reduction of engine performance. Further analysis of energy, exergy and tribological characteristics of the Macadamia biodiesel is recommended for assessing its feasibility for commercial application.