Utilization of ethanol-diesel blend fuels in diesel combustion and partial Premixed Charge Compression Ignition (PCCI) combustion was attempted to achieve clean diesel engine. The experiment was carried out using a naturally aspirated single cylinder DI diesel engine equipped with common rail injection and cooled EGR systems. PCCI combustion was realized by two-stage injection in which part of fuel was injected during the compression stroke and the rest near TDC. The results indicate that under middle to high engine loads, both weak sooting tendency and low cetane number of ethanol blend fuels offer a great improvement in PM and NOx emissions when compared to the diesel combustion with ordinary pilot injection. However, this results in penalties in thermal efficiency, THC and CO emissions.