Diesel engines are widely used as the power source for inland and marine transportation, such as trucks, buses, ships, and agricultural and industrial vehicles. However, the pollutants of their emissions-especially particulate matter (PM) and nitrogen oxides (NOx)-pose a threat to human health as well as our environment. The use of emulsified diesel fuel as an alternative fuel for diesel engines has long been considered to be one of the feasible techniques for reducing pollutant emissions. However, most applications of emulsified fuel are limited to the two-phase water-in-oil (W/O)-type emulsions. The three-phase emulsification technique for preparing oil-in-water-in-oil (O/W/O) or water-in-oil-in-water (W/O/W) is only applied in the medical, cosmetic, and food industries. This study explores the potential of using O/W/O emulsions with a diglyme additive, as an combustion improver, as a substitute for ASTM No. 2D diesel fuel. Engine performance and combustion characteristics were evaluated as the indicators for potential use. Experimental results showed that a diglyme additive enhances NOx emissions but deteriorates the emulsification stability of O/W/O three-phase emulsions. However, the addition of oxygenated diglyme to the O/W/O three-phase emulsions facilitated the combustion process, leading to higher combustion efficiency and lower fuel consumption rate and brake-specific consumption (bsfc). In addition, the smoke opacity of PM collected on the filter paper and CO emission decreased while fuel conversion efficiency, excess oxygen emission, and NOx emission increased with the addition of the oxygenated diglyme to both the two-phase W/O and three-phase O/W/O emulsions. The burning of the neat ASTM No. 2D diesel fuel produced the highest CO2, NOx, and O-2 contents, as well as the highest smoke opacity from PM, fuel conversion efficiency, and exhaust gas temperature, but also produced the lowest CO emission and bsfc value.