Fossil fuel depletion and its emissions lead to finding an alternative source to fulfill the world’s energy needs. Alternative fuels in particular biodiesel are the fusible alternative due to their availability and cost. The main drawback of biodiesel is its higher viscosity which can be effectively reduced by the transesterification process. The key objective of this research is to find biodiesel with higher performance, stable combustion, and lower emission characteristics. By keeping the above aim in consideration, this investigation has three phases as mentioned below. The first phase deals with finding the best waste cooking oil (WCO) blend in proportions tested. The second phase is used to find the best dosage level of titanium dioxide nanoparticle inclusion in biodiesel to improve combustion characteristics. For the intention to reduce oxides of nitrogen emission, the third phase comprises using exhaust gas recirculation (EGR) in nominal percentages. As a result, W20 (20% waste cooking oil and 80% diesel in volume) has a comparative brake thermal efficiency (BTE) of 26.9% with diesel and other blends in the first phase. In the second phase, the BTE is further increased by a maximum extent of 32.34% by the addition of 150 ppm of titanium dioxide nanoparticle, but it had the drawback of higher emission of (oxides of nitrogen) NOx around 13.44 g kWh–1. The third phase is aimed to minimize the emission of NOx by the inclusion of EGR which pulls down NOx by about a maximum of 25.3% for the W20 with 150 ppm of TiO2 with 15% of EGR (W20T150EGR15%) blend, but it dips down the performance characteristics slightly. Overall, it can be concluded that W20 with 150 ppm of TiO2 with 5% of EGR (W20T150EGR5%) has comparatively better performance and combustion with reduced NOx emissions.