In this study, hybrid fuels consisting of rapeseed oil/diesel blend, 1% aqueous ethanol and a surfactant (oleic acid/1-butanol mixture) were prepared and tested as a fuel in a direct injection (DI) diesel engine. The main fuel properties such as the density, viscosity and lower heating value (LHV) of these fuels were measured, and the engine performance, combustion and exhaust emissions were investigated and compared with that of diesel fuel. The experimental results showed that the viscosity and density of the hybrid fuels were decreased and close to that of diesel fuel with the increase of ethanol volume fraction up to 30%. The start of combustion was later than that of diesel fuel and the peak cylinder pressure, peak pressure rise rate and peak heat release rate were higher than those of diesel fuel. The brake specific fuel consumption (BSFC) of hybrid fuels was increased with the volume fraction of ethanol and higher than that of diesel. The brake specific energy consumption (BSEC) was almost identical for all test fuels. The smoke emissions were lower than those for diesel fuel at high engine loads, the NOx emissions were almost similar to those of diesel fuel, but CO and FIC emissions were higher, especially at low engine loads. (C) 2013 Elsevier Ltd. All rights reserved.