Today the world is in dilemma for the prevention of both of fuel depletion and environmental degradation crises. Due to excessive need, indiscriminate extraction and consumption of fossil fuels have led to a reduction in petroleum reserve. Developing countries such as India depend heavily on oil import. Diesel being the main transport fuel in India, finding a suitable alternative to diesel is an urgent need of the hour. Jatropha based bio-diesel (JBD) is a non-edible, renewable fuel suitable for diesel engines and has a potential of large-scale employment for wasteland land with relatively low environmental degradation. As Jatropha oil is free from sulphur and still exhibits excellent lubricity and is a much safer fuel than diesel because of its higher flash and fire point. Performance parameters including brake thermal efficiency (η), brake specific fuel consumption (BSFC) with varying loading conditions showed Jatropha biodiesel as an effective alternative on four stroke single cylinder compression ignition engine. Also the effect of exhaust gas recirculation (EGR) at 10% re circulation showed Jatropha as an effective fuel since the inherent oxygen present in the bio-diesel structure compensates for oxygen deficient operation under EGR.