Cleaner alternatives to internal combustion engines are essential for reducing pollution emissions while maintaining performance. In this study, a ternary blend of diesel, biodiesel, and propanol (80:10:10 by volume) was prepared and enriched with multiwalled carbon nanotubes (MWCNTs) at concentrations of 40, 60, and 80 ppm to evaluate its combustion, performance, and emission in a monocylinder diesel engine. Compared to diesel fuel, the ternary blends with MWCNTs demonstrated an increase of up to 6.73% in the net heat release rate and an average decrease of up to 14.74% in cylinder pressure. Engine performance improved with a rise in the brake thermal efficiency up to 11.79% on average, while the brake-specific fuel consumption decreased by up to an average of 6.04%. Emission analysis indicated substantial reductions in carbon dioxide (up to 18.72%) and nitrogen oxides (up to 42.39%), whereas unburned hydrocarbons increased by an average of 26.66%. These results indicate that the synergistic interaction among biodiesel oxygen content, propanol volatility, and the catalytic/thermal conductivity properties of MWCNTs enables improved combustion efficiency while mitigating carbon dioxide and nitrogen oxides. This study provides new insight into the role of carbon-based nanomaterials in enhancing oxygenated ternary diesel blends and highlights their potential to support cleaner and more efficient compression ignition engine operation.