In this study, hybrid fuels consisting of coconut oil, aqueous ethanol and a surfactant (butan-1-ol) were prepared and tested as a fuel in a direct injection diesel engine. After determining fuel properties such as the density, viscosity and gross calorific values of these fuels, they were used to run a diesel engine. The engine performance and exhaust emissions were investigated and compared with that of diesel. The experimental results show that the efficiency of the hybrid fuels is comparable to that of diesel. As the viscosity of the hybrid fuels decreased and approached that of diesel, the efficiency increased progressively towards that of diesel. The exhaust emissions were lower than those for diesel, except carbon monoxide emissions, which increased. Hence, it is concluded that these hybrid fuels can be used successfully as an alternative fuel in diesel engines without any modifications. Their completely renewable nature ensures that they are environmentally friendly with regard to their emissions characteristics. (C) 2010 Elsevier Ltd. All rights reserved.