This paper reports on the use of aluminium oxide nanoparticles (AONP) as additive to the diesel fuel and its effects of performance and emission characteristics of the CRDI diesel engine coupled with an eddy current dynamometer and a data acquisition system. The nanoparticles added to diesel in different proportions (25ppm and 50ppm) using a mechanical homogenizer and an ultrasonicator. The aluminium oxide nanoparticles act as an oxygen donating catalyst and provide oxygen for the oxidation of CO and hydrocarbons (HC). The results also showed considerable improvement in brake thermal efficiency due to the influence of the aluminium oxide nanoparticles addition in diesel fuel. The tests revealed that aluminium oxide nanoparticles can be used as additive in diesel to mitigate the exhaust emissions significantly.