This paper presents an experimental work for the realization of the concept including nanofuel application to a single cylinder diesel engine, with and without magnetic fuel conditioning at various locations on fuel line. With the effect of magnetic field, ionization takes place and declustering the hydrocarbon fuel molecules for better atomization of the fuel and mixing the fuel-air mixture to enhance the combustion, which improves the fuel economy. CuO nanofuel was prepared by 0.5% CuO (wt./wt.) mass fraction nanoparticles blended with diesel fuel by means of a mechanical homogenizer and an ultrasonicator. Physicochemical properties of CuO nanofuel were measured and compared with neat diesel fuel. Their stability characteristics were analyzed under static conditions. The effects of the CuO nanoparticles on the engine performance and emissions were also investigated with permanent magnet of field strength 3000 Gauss. Mounting permanent magnets in fuel line enhanced fuel properties such as it aligned and oriented hydrocarbon moleculesfor better atomization of fuel, which results better emission of engine. The experimental analysis revealed that CuO nanofuel has improved performance and emission characteristics. The engine test results with magnetic fuel conditioning showed that, the CuO nanofuel has better mechanical efficiency of 7%, reduction in BSFC by 6% and reduction in 13% and 19% for CO2 and NOx emissions respectively, compared to diesel fuel. As a whole, CuO nanofuel with magnetic fuel conditioning have pronounced effect on enhancing the brake thermal efficiency and reducing the harmful pollutants of the compression ignition engine.