In this present work aims at evaluate the performance and emission characteristics of a diesel engine fueled with annona-ethanol blend as a fuel. A single cylinder water-cooled four stroke diesel engine was used. The ethanol is blended with Annona Methyl Ester (AME) in the proportions of 60-40, 55-45, 50-50, 45-55. The performance and emission characteristics of annona-ethanol blends are evaluated by operating the engine at different load conditions. The performance parameters such as Brake Specific Fuel Consumption (BSFC), Brake Thermal Efficiency (BTE) and Exhaust Gas Temperature (EGT) were evaluated. Further, the exhaust emissions such as oxides of nitrogen (NOx) unburned hydrocarbon (HC), carbon monoxide (CO) and smoke were measure. It is found that annona-ethanol blend (A-E-50-50) showed slight increase in brake thermal efficiency with the reduction of exhaust gas temperature. Further, it is found that the slight reduction in NOx emission and smoke emission. It is also found that reduction in HC and CO emission was achieved. Hence, it is concluded that A-E 50-50 can be used as alternate fuel for DI diesel engine without any major modification.