Biomass acquires better ability to replace crude petroleum products in most of all the forms. Cardanol oil extracted from cashew nut shell liquid by pyrolysis process represents a growing abundant energy source. In this work, cardanol oil was extracted by pyrolysis process and chemical composition was studied by using gas chromatography-mass spectroscopy. Experimental investigations were conducted in a single cylinder direct injection diesel engine with different blends of cardanol oil-diesel fuel such as neat diesel, B20, B40, B60, B80, and B100. From the pragmatic results, it was observed that at full load operating condition and at B40, without any modifications in engine, brake thermal efficiency was increased by 1.82% and specific fuel consumption was reduced by 1.8%. On the other hand, carbon monoxide emission was same as that of diesel for all the blends at maximum load conditions. Unburned hydrocarbon for B40 was lower than all blends and was slightly higher than diesel fuel at full load. Formation of nitrogen oxide was slightly higher than diesel fuel for all blends in proportion with increase in load. Smoke opacity gradually reduces with increase in load for all blends and B40 shows much reduced level than diesel at full load. Overall, B40 shows better performance and much comparable emission level with diesel fuel.