The main objective of this research work was to reduce the exhaust gas temperature of direct compression ignition engine by adding nano particle in biodiesel. An Experimental analysis was carried to study the performance characteristics of four stroke, single cylinder, water cooled direct injection diesel engine. Nano particles were added with biodiesel in mixed proportion of 10, 20, 30, 40, 50, 60 parts per million. The range of nano particle size was 35-80 nanometer. The engine was loaded with different brake power with each blend of fuel. The reduction in exhaust gas temperature is observed.