For many years, biodiesel has been seen as an alternative fuel with the ability to eventually replace diesel. Products that are emitted when engines undergo a complete combustion reaction provide no direct health risks to humans. Due to certain fuel characteristics, biodiesel performs poorer during combustion process than diesel fuel. As a result, smoke emissions, complete combustion products like CO2, and incomplete combustion products including HCs, CO, and NOX are released into surrounding. An attempt has been made to enhance combustion and emission performance of CRDi-VCR type diesel engine using B20 neem biodiesel with a novel nanoparticle mixture of Al2O3 and ZnO as nano fuel additives for various dosing levels. B20 Neem biodiesel with nano additives was tested on a CRDi-VCR type diesel engine at a constant speed of 1500 rpm at various loads. Due to higher oxidation rate of hydrocarbon molecules, the nano additive reduced CO emissions in studies while improving the thermal conductivity, mass dissipation, and heat transfer of the tested nano fuels. Due to the improvement in the combustion reaction, CO2 emission increased with product of complete combustion. Brake specific fuel consumption was reduced at full load condition with the addition of 25 ppm NPs. Also, neem biodiesel fuel results in appreciably improved brake thermal efficiency, lower values of smoke opacity, and lower CO, NOX and HC emissions.