In this paper, the exergy analysis and environmental assessment are performed to the biodiesel and diesel-fueled engine at full 294 Nm and 1800 r/min. The exergy loss rates of fuels are found as 15.523 and 18.884 kW for the 100% biodiesel (BDF100) (obtained from cooking oil) and Japanese Industrial Standard Diesel No. 2 (JIS#2) fuels, respectively. In addition, the exergy destruction rate of the JIS#2 fuel is found as 80.670 kW, while the corresponding rate of the BDF100 is determined as 62.389 kW. According to environmental assessments of emissions and nanoparticles of the fuels, the biodiesel (BDF100) fuel is more environmentally benign than the diesel (JIS#2) fuel in terms of particle concentration and carbon monoxide and hydrocarbon emissions. So, it is better to use this kind of the 100% biodiesels in the diesel engines for better environment and efficiency in terms of the availability and environmental perspectives.