The availability of natural energy resources and the environmental issues are the most significant issues that are often highlighted by the world communities. With regard to these problems, isobutanol is a higher chain alcohol with four carbons which can be derived from biomass resources and it is potential to become an alternative fuel source besides the biodiesel for a diesel engine. The aim of this study is to evaluate the effect of isobutanol with Calophyllum inophyllum methyl ester and diesel as the ternary blend on physicochemical properties, engine performance, and emission characteristics. Five different fuel blends containing Calophyllum inophyllum biodiesel and isobutanol were tested on a single-cylinder direct injection diesel engine at different engine load of brake mean effective pressure. The physicochemical properties of the fuel blends were measured and then compared with neat diesel. The results indicate that the blend containing isobutanol and CIME gives a slight increase in BSEC and EGT and a minimal drop in BTE as compared to that of neat diesel. Besides that, the tested blends show a reduction of carbon monoxide and unburned hydrocarbon emissions. Meanwhile, all the fuel blends show a minimal increase in carbon dioxide and nitrogen oxides emissions, compared to that of neat diesel. Isobutanol can be proved as a preferred substitute for biodiesel and diesel fuels to achieve desired engine performance and emissions level.