The injection and spray characteristics of a diesel engine with 7.4-kW rated power output for use of different karanja biodiesel blends (B10 and B20) are studied for identifications of further scope of performance improvement and emission reduction. The dynamic injection timing advanced for the biodiesel blends resulting in higher NOx emission, which increased from 2.94 g/kW-hour with base diesel to 3.40 g/kW-hour with B20. At the rated load, the dynamic injection timing advanced from 9.2 deg. crank angle before top dead centre (CA BTDC) with base diesel to 9.3 and 9.4 deg. CA BTDC for B10 and B20, respectively. The in-line injection pressure increased from 460 bar with base diesel to 480 bar with B20, and in-cylinder injection duration also increased from 9.5 deg. CA with base diesel to 10.2 deg. CA with B20. The penetration distance increased from 33.37 mm with base diesel to 34.80 mm and 34.25 mm with B10 and B20, respectively. Sauter mean diameter (SMD) increased from 11.39 µm with base diesel to 12.71 and 17.09 µm for B10 and B20, respectively, at the rated load. Air entrainment increases for the biodiesel blends, and it enhances the mixing rate of injected fuel with surrounding hot air. Vaporization time of biodiesel droplets increases because of larger SMD. However, increase in over penetration distance, large SMD and high vaporization time for the biodiesel blends would lead to deteriorated performance and emission characteristics of diesel engines. The remedial measures of spray characteristics for further performance improvement and emission reduction also are highlighted in the paper. Copyright © 2011 John Wiley & Sons, Ltd.