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Biodiesel from Jatropha oil is produced through catalyzed homogeneous transesterification. Hydrogen peroxide (H2O2) is considered as additive. Blends of Jatropha considered in the present study are 60% diesel, (40-A)% biodiesel and A% additive, varying A from 0 to 10. Identifying optimal input variables (such as additive volume percentage, injection pressure, and load) is important for improving the engine performance and reducing emissions. Air-fuel ratio; brake specific fuel consumption (BSFC); and brake thermal efficiency (BTE) are the engine performance characteristics. Carbon monoxide (CO); carbon dioxide (CO2); exhaust gas temperature (EGT); nitrogen oxide (NOx); and smoke opacity are the emission characteristics. 27 experiments need to be performed for the assigned 3 levels and 3 input variables. The Taguchi's L9 orthogonal array (OA) is chosen to perform only 9 experiments to obtain the optimal solution. The expected range of performance characteristics and emissions was obtained following a modified Taguchi approach. Empirical relationships are developed and verified through engine performance and emission characteristics.