This work presents the effect of the ternary oxygenated additive on diesel biodiesel blended fuel to evaluate the engine characteristics. The Calophyllum inophyllum trees being abundant in India can lessen the dependence on petroleum imports to a specific extent. Methyl tertiary butyl ether is used as an oxygenated additive for the ternary blends preparation as 5–20% by volume. Seven blends of neat baseline diesel, biodiesel (Calophyllum inophyllum Methyl Ester), a blend of diesel (50%)-biodiesel (50%), a blend of diesel (50%)-biodiesel-methyl tert-butyl ether (5, 10, 15, and 20%) are prepared which are tested on a single cylinder, constant speed diesel engine. The experimental results were revealed that the replacement of biodiesel by MTBE has shown a slight reduction in brake thermal efficiency with a slight increase in brake-specific fuel consumption. Further, the MTBE addition in ternary blends reduced the unburned hydrocarbon, CO, and NOx by 63.9, 6.4, and 3.37% respectively. In addition, the carbon dioxide emission is almost similar to diesel fuel at a higher addition of MTBE with diesel-biodiesel blend. In the combustion point of view, the addition of 5% MTBE resulted in 3.49 and 5.1% reduction of peak pressure and heat release rate are observed as compared to diesel fuel. Critical analysis in combustion aspects is also carried out and it is witnessed with prolonged ignition delay during MTBE addition with diesel-biodiesel blends. © 2018, Springer-Verlag GmbH Germany, part of Springer Nature.