Algal biodiesel is realized to be the most sustainable solution to meet future energy demands in comparison to its competitors. Marine seaweed was explored for the feasibility of biodiesel production. The present study deals with the production of biodiesel from the green seaweed Caulerpa pelata. Algal biodiesel was blended with various ratios of commercial diesel. Blends of B10, B20, B50, B100 and commercial diesel were compared for engine testing and emission analysis. Engine testing was performed for Caulerpa peltata algal biodiesel and it was found that properties like brake thermal efficiency, total fuel consumption and indicated thermal efficiency were comparable to commercial diesel. The biodiesel produced from the seaweed was analyzed for emission which was done on a four- stroke, single cylinder air-cooled Kirloskar Diesel engine fitted with an AVL Gas analyser Digas 444 Software Version. It was found that the emission of carbon monoxide, carbon dioxide and hydrocarbons was less for pure biodiesel and biodiesel blends than for commercial diesel. Only Oxides of Nitrogen emission was higher which can be rectified by suitable engine design or by adding additives.