A numerical study is carried out to assess the effect of utilizing municipal solid waste-derived bio-ethanol blends on the combustion performance and emission attributes of a Mahindra Jeeto 1-cylinder 4-stroke, naturally aspirated, direct injection diesel engine. The engine has a 93 mm bore and 92 mm stroke. The tested fuels are designated as E10 (10% bio-ethanol and 90% diesel), E20 (20% bio-ethanol and 80% diesel), and E30 (30% bio-ethanol and 70% diesel) v/v fraction, respectively, that are contrasted with neat diesel fuel. Diesel-RK software, a thermodynamic full-cycle engine evaluation software, is used to perform the numerical comparative study of tested fuel blends in terms of neat diesel. For numerical validation, the actual diesel engine was operated at a constant 1800 rpm speed with variation in load from 0 to 30 Nm in step size of 5. Maximum in-cylinder pressure, oxides of nitrogen emission, and brake-specific fuel consumption are the key factors used for numerical and experimental validation. Results obtained from numerical studies show that the E30 fuel blend causes a 29.97% rise in the maximum in-cylinder pressure of the engine compared to neat diesel fuel. Further, E30 causes a decline in exhaust gas temperature by 1.44% compared to neat diesel and also improves performance traits, including brake thermal efficiency and mechanical efficiency, by 3.36% and 0.61%, respectively. E30 enhances the emission characteristics of nitrogen oxide, Bosch smoke number, and specific particulate matter by a decrease of 26.55%, 23.04%, and 25.48%, respectively, compared to neat diesel.