In the present work, a single cylinder diesel engine was suitably modified to operate on diesel, diesel and diethyl ether (DEE) in blended form in which percentage of diethyl ether in diesel blends was varied from 5 to 20% in steps of 5%. Further the effects of exhaust gas recirculation (EGR) on the performance of diesel engine fueled with alcohol and diesel blended fuels were studied. The pre-and post-combustion methods were adopted to study the performance of the modified diesel engine. Post combustion analysis involved use of emission control devices like Diesel Particulate Filter (DPF) and Diesel Oxidation Catalyst (DOC) combination for effective control of unburned hydrocarbon (UBHC) and particulate matter (PM) respectively. From the study it was observed that the engine was consistent in its operation throughout the experimental investigations when operated on selected fuel combinations. Based on the comprehensive experimental investigations carried out the following conclusions have been derived. The brake thermal efficiency (BTE) increased with increased injection of DEE and highest BTE was found to be 29.25% for 80% loading condition using 20% DEE and without EGR. In-cylinder pressure and heat release profiles showed delayed combustion for DEE blends compared to diesel and the same was more pronounced with higher DEE blends. Shorter combustion duration was observed with DEE compared to diesel. Increased smoke and UBHC emissions were observed for increased EGR induction for all operating conditions while the oxides of nitrogen (NOx) emission decreased. For 20% DEE fuel operation adopted along with DPF, smoke emissions reduced by 75%. It is observed that, adopting DPF, NOx emission reduced by 10%; while adopting DOC, NOx emission reduced by 6%. At 80% load optimum conditions for the modified diesel engine operation with selected fuel combinations were observed for 20% diethyl ether/diesel ratio, and 20% exhaust gas recirculation rate along with both DOF and DOC respectively.