The aim of the present work is to study the stability aspect of hydrous ethanol diesel Al2O3 (HEDA) nanoemulsified fuel and its corrosive effect on different metals along with the measurement of its physicochemical properties such as density, specific gravity, kinematic viscosity, phase separation layer formation, pH value, and color. The freeze thaw cycles were used as a storage condition to analyze the stability measures. The close- and open-cap static immersion methods were used to study the corrosion effect on aluminum, stainless steel, and mild steel via the weight loss technique. The results reported an increase in the density, specific gravity, and kinematic viscosity while a decrease in the stability with an increase in water and ethanol percentage in the HEDA emulsion, without the formation of a phase separation layer. The highest-water containing emulsion category (W20) was reported to be the least stable on the basis of stability test results, of which W20H20D80 was noticed to be the most unstable, while WSH10D90 was observed to be the most stable HEDA emulsion. The static immersion open-cap condition showed a greater corrosive effect than the close-cap condition. Mild steel is not recommended to manufacture fuel system components of a diesel engine if HEDA emulsion is used as a fuel. The HEDA emulsified fuel combustion can exhibit a toxic effect on living beings and the environment in the prolonged period of time.