Biodiesel is non-toxic and renewable in nature. Further advantages over petro-diesel include higher cetane number, no sulphur emission, low aromatics, low volatility and the presence of oxygen atoms in the fuel molecule. In this research paper the Mahua seeds were procured directly from farmers and processed as per the standard protocols. The oil was obtained through suitable Oil expeller to know the basic properties. The properties of Mahua oil were determined as per the standard protocol. The performance and emissions of a single cylinder, stationary diesel engine was evaluated using Mahua oil and compared with standard diesel operation. Mahua oil was preheated to 130°C and the effect of preheating on the engine performance and emissions were determined. The heat release rate of Mahua oil was enhanced with preheating. The engine performance improved and NOx emissions decreased while the engine was running with preheated Mahua oil. A marginal increase in NOX emission was noted. It is concluded that Mahua oil preheated to 130°C can be used as diesel substitute under emergency situations.