Renewable forms of energy, such as biofuels, have the potential to displace fossil fuels in a wide variety of applications. Further benefit can be achieved through the use of combined heat and power devices, as this is accompanied with a considerable increase in energy efficiency and lower costs associated with fuel consumption. In this study, we examined the performance of a residential microcogeneration system based on a Stirling engine and fueled by diesel and ethanol. Run on diesel, and on a lower heating value basis, the system achieved a power efficiency of 12.1%, a thermal efficiency of 73.3%, and a total efficiency of 85.4%. Powered by ethanol, the corresponding efficiencies were 11.8%, 73.9%, and 85.7%, respectively. During steady state operation, the total unburned hydrocarbon emissions for both fuels were negligible, while the particulate emissions for ethanol and diesel were found to be 0.40 mg/kWh and 0.42 mg/kWh, respectively. Emissions were extremely low, as the combustor features a continuous premixed flame that facilitates the complete burnout of already evaporated fuel. Though emissions of nitrogen dioxide, methane, formaldehyde, and acetaldehyde were also negligible for both fuels, carbon monoxide and nitric oxide emissions for diesel (71 and 67 mg/m(3), respectively) were much higher than those observed for ethanol (50 and 19 mg/m(3), respectively). Lower nitric oxide emission levels for ethanol were attributed to its lower flame temperature, whereas reductions in carbon monoxide emissions were likely a result of a higher degree of fuel/air mixing with ethanol, due to higher gas jet velocities of the fuel exiting the orifices of the evaporator. Lastly, parametric studies on primary engine set points, including coolant temperature and exhaust temperature, were conducted to understand their effect on engine performance.