Oleander oil has been used as raw material for producing biodiesel using ultrasonic irradiation method at the frequency of 20 kHz and horn type reactor 50 watt. A two-step transesterification process was carried out for optimum condition of 0.45 v/v methanol to oil ratio, 1.2% v/v H2SO4 catalyst, 45 °C reaction temperature and 15min reaction time, followed by treatment with 0.25 v/v methanol to oil ratio, 0.75% w/v KOH alkaline catalyst, 50 oC reaction temperature and 15 min reaction time. The fuel properties of Oleander biodiesel so obtained confirmed the requirements of both the standards ASTM D6751 and EN 14214 for biodiesel. Further Oleander biodiesel-diesel blends were tested to evaluate the engine performance and emission characteristics. The performance and emission of 20% Oleander biodiesel blend (B20) gave a satisfactory result in diesel engines as the brake thermal efficiency increased 2.06% and CO and UHC emissions decreased 41.4% and 32.3% respectively, compared to mineral diesel. Comparative investigation of performance and emissions characteristics of Oleander biodiesel blends and mineral diesel showed that oleander seed is a potential source of biodiesel and blends up to 20% can be used for realizing better performance from an unmodified diesel engine.