The use of water-in-diesel (W/D) emulsion fuel has an optimistic influence in promoting lower levels of NOx and PM emissions with improved engine performance. Concurrently, rough engine operation is perceived with W/D emulsion fuels due to the longer ignition delay period, resulting in the high rate of pressure rise at a later degree of CA. The present study focuses on achieving a shorter ignition delay period in W/D emulsion fuel by incorporating ZnO nanoparticles. Experiments were conducted in two phases. In the first phase, stable W/D emulsion fuels with different mass fractions of nanoparticle (5W/D, 10W/D, 10W/D50ZnO, and 10W/D100ZnO) were synthesized and their properties were measured. In the second phase, experiments were conducted in a single-cylinder, four-stroke diesel engine under different engine load conditions to study the combustion and performance characteristics of the above-mentioned sample fuels. The results of this study showed that the physico-chemical properties of W/D emulsion fuels and nano-incorporated W/D emulsion fuels meet the standard diesel fuel specifications with an acceptable emulsion stability period. In addition, W/D emulsion fuels with ZnO incorporated blend reduce the ignition delay period and promote a better level of combustion and performance levels over BD and W/D emulsion fuels.