Abstract Combustion characteristics of ethanol-water (EW) droplets laden with ceria nanoparticles are investigated. The present experimental study focuses on three facets of droplet combustion (i) burning time scale of droplets with and without NPs, (ii) pathways of secondary atomisation due to interface deformations and (iii) coupling of droplet shape deformations and flame heat release. A theoretical vaporisation timescale is advocated which considers natural convection-based evaporation, mass loss due to daughter droplet ejections, and flow through porous media. Droplets seeded with ceria nanoparticles, exhibit arrested surface undulations although internal ebullition is discernibly enhanced as compared to EW droplets without NPs. Deformations and formation of surface craters in EW droplets are traced to the imbalance between local vapour recoil (due to rapid ethanol vaporisation) and surface tension. Such craters collapse and form high-speed ligaments which eventually break at the tip through Rayleigh–Plateau mechanism. This pathway of secondary atomisation of EW droplets has been elucidated using a modified local weber number. On the contrary, for nanofuels, bubble rupture is the mechanism behind the surface crater formation. Proper orthogonal decomposition (POD) technique is utilised for investigating the droplet shape and flame heat release coupling. EW droplet shape and HR are found to be a synced system with a phase lag arising from the flame response timescale. However, a weak coupling is detected for nanofuel droplets.