Physico-chemical properties of microalgae biodiesel depend on the microalgae species and oil extraction method. Dioctyl phthalate (DOP) is a clear, colourless and viscous liquid as a plasticizer. It is used in the processing of polyvinyl chloride (PVC) resin and polymers. A new potential biofuel, hydrothermally liquefied microalgae bio-oil can contain nearly 11% (by mass) of DOP. This study investigated the feasibility of using up to 20% DOP blended in 80% diesel fuel (v/v) in an existing diesel engine, and assessed the performance and exhaust emissions. Despite reasonable differences in density, viscosity, surface tension, and boiling point, blends of DOP and diesel fuel were found to be entirely miscible and no separation was observed at any stage during prolonged miscibility tests. The engine test study found a slight decrease in peak cylinder pressure, brake, and indicated mean effective pressure, indicated power, brake power, and indicated and brake thermal efficiency with DOP blended fuels, where the specific fuel consumption increased. This is due to the presence of 16.4% oxygen in neat DOP, responsible for the relatively lower heating value, compared to that of diesel. The emission tests revealed a slight increase in nitrogen oxides (NOx) and carbon monoxide (CO) emissions from DOP blended fuels. However, particulate matter (PM) emissions were lower from DOP blended fuels, although some inconsistency in particle number (PN) was present among different engine loads.