Aiming to reduce the fuel consumption and exhaust emissions of internal combustion engines, nano-ceria (CeOll based Fuel Borne Catalyst (I1FBC) developed by NanoScience Innovation Pte Ltd, Singapore has been directly blended with Vietnam's market diesel fuel in the ratio of 1:5,000. This blended diesel consists of more than 99.99 percent diesel, less than 0.01 percent surfactant (hydrocarbon), and less than 10ppm (10mg/liter) of CeO2 nanoparlicles. Comparative experiments were conducted on single cylinder research engine AVL 5402 to find the impacts of this FBC additive on engine's performance, exhaust emissions and combustion profile. The experimental results show that there are no adverse effects on the engine after 56-hours running with FBC. The reduction of fuel consumption increases gradually and reaches 7.7 percent after 56-hours running with FBC additive. The soot concentration has declined on the averaged of 10-20 percent. The carbon monoxide (CO) emission has increased significantly in the early engine running stage (less than 20-hours) which might be due to the burning off the deposited carbon through catalytic cleaning effect. However, after 20-hours running with FBC additive, the CO emission has decreased dramatically. The total hydro-carbon (THC) emission has decreased by more than 10 percent in various operating regimes. However, nitrogen oxides (NOx) emission reduction has not been as significant as expected. The peak of combustion pressure profile has moved closer to firing top dead center at the positive crank angle regime after adding FBC into the fuel. This phenomenon has been observed most prominent at low engine speed (1,400rpm). However, at higher engine speeds, the time point of pressure peaks has not changed significantly.