Development of any country depends upon the availability of transport facility. Oil is the main source of energy which is now consumed up to 30% for transport facility in the world. The fossil fuel stocks all over the world are reduced due to industrial growth, innovation in transport vehicles and expanding urbanization. The application of biodiesel has shown a positive impact in minimizing these issues. Jatropha, locally known as ratanjot, is most considerable feedstock in India. Biodiesel (Jatropha methyl ester) of it as an environmentally and eco-friendly second-generation fuel has the potential to provide comparable compression ignition (CI) engine performance and enhance the lubrication. In this paper, the work is carried out on a single-cylinder variable compression ratio CI engine fuelled with various blends of Jatropha methyl ester with diesel to study vibration, performance and emission characteristics of the engine and its optimization using Taguchi method as well as multiple regression analysis. The experiments are conducted on a single-cylinder CI engine for various operating parameters with different levels, viz., compression ratio, fuel injection pressure, fuel fraction, and injection timing. The load for engine has been incremented with the step 1/3% of full load from zero to full load. This study aims first to address the optimal level of operating parameters and then evaluate by regression model of the output variables, viz., acceleration of engine head in linear and lateral directions, specific fuel consumption, brake thermal efficiency, and oxides of nitrogen as function of operating parameters. Taguchi's L-16 orthogonal array is applied for reducing the number of runs and time for experiment. The obtained optimal combination of the operating parameters in the single-cylinder CI engine operated on Jatropha biodiesel blend for better output is compression ratio 15.5, injection pressure 270 bar, fuel fraction 20% and injection timing 23 degrees bTDC. The results demonstrate the Jatropha methyl ester can be applied as an alternative to the petroleum diesel in conventional diesel engines.