Biodiesel is used widely as an alternative fuel for diesel engine due to biodegradable, oxygenated, renewable and compatible with diesel engines . In fact, biodiesel emission has decreased the levels of potentially carcinogenic compounds. However, a certain biodiesel such as Jatropha Oil Methyl Ester (JOME) has resulted in the increase of specific fuel consumption and higher NOx emissions. Therefore, the objective of this study is to investigate the effects of Palm Oil Methyl Ester (POME) in the blended fuel (Fossil fuel + JOME) on the fuel consumption and exhaust emission. Experiments were carried out at a constant engine speed (2000 rpm) with variable of engine loads. Results show that the addition of POME leads to the significant reduction in brake specific fuel consumption (BSFC), Total hydrocarbons (THCs), carbon monoxide (CO) and nitrogen dioxide (NOx) emissions. This study shows a huge difference for Total hydrocarbons emission of blends with 5% POME compared to blends with 10% and 15% of POME. Carbon monoxide emission for blends with 15% POME is the lowest at constant engine speed with various engine loads which in average is 53% lower than blends of 5% POME. This is because blends with higher percentage of POME has higher cetane number hence shortened the ignition delay resulted in the lower possibility of formation of rich fuel zone and thus reduces CO emissions. Moreover, the higher percentage of POME also resulted in lower NOx emission regardless of engine loads. The blends with 15% POME had the lowest NOx emission which is 25% less compared with the blends of 5% POME. The study recommended that, additional POME to the blended fuel can be considered as a good initiative to improve blended fuel property for diesel engine due to its potential to improve engine emissions and reduce brake specific fuel consumption. In conclusion, the blends of POME into (Fossil fuel + JOME) improves engine emission without significantly increasing fuel consumption.