An experimental investigation was conducted to investigate the effect of Bio-ethanol fuel on the engine performance and exhaust emission characteristics under various engine operating conditions. To investigate the effect of bio-ethanol fuel, the commercial 1.6L SI engine equipped with 4 cylinder was tested on EC dynamometer. The engine performance including brake torque, brake specific fuel consumption, and barke specific energy consumption of bio-ethanol fuel was compared to those obtained by pure gasoline. Furthermore, the exhaust emissions were analyzed in terms of regulated exhaust emissions such as unburned hydrocarbon, oxides of nitrogen, and carbon monoxide.Result of this work shows that the effect of blending of ethanol to gasoline caused drastic decrease of emissions under various operating conditions. Also, improved engine performance such as brake torque and brake power were indicated for bio-ethanol fuel.