Water in diesel (W/D) nanoemulsions were prepared by the aid of high energy emulsification method. The formulation was accomplished in the presence of Triton X-100 surfactant. A wide range of surfactant concentration (0.25%–0.40% v/v) with varying amount of water percentage (0.50%–0.90% v/v) was used in the preparation of W/D nanoemulsion fuels. The droplet size of the nanoemulsions at different water:surfactant:diesel ratio increased as surfactant concentration decreased. High kinetic stability was observed in the nanoemulsions. The stability of nanoemulsions with 0.40% surfactant concentration was persisted more than two weeks without phase separation. The droplet size of the nanoemulsions increased with time proving the influence of breakdown processes such as Ostwald ripening. Combustion characteristics of W/D nanoemulsions were studied in terms of different formulating compositions. An engine test bed of diesel engine was used to combust the nanoemulsions to study the exhaust emission concentrations such as CO, CO2, NH3 and NO, and performance parameters include brake power, thermal efficiency. The highest reduction in the exhaust gas emissions concentrations was notified by using surfactant concentration of 0.40% with 0.90% water content. The lowest calorific value of prepared W/D nanoemulsions was achieved 38.48 MJ/kg by using surfactant concentration of 0.40% with 0.90% water. The highest brake power and thermal efficiency was also obtained with 0.40% surfactant concentration and 0.90% water content. In addition, the characteristic evaluation of W/D nanoemulsions was made on the basis of emission characteristics of neat diesel. It has been observed that the use of W/D nanoemulsions in diesel engine has evidently led to the reduction in exhaust emissions, anticipating its application as an alternative eco-friendly fuel in the internal combustion engine.