This article reports the development and demonstration of an instrumented diesel engine test system for the assessment of power performance, fuel efficiency, and exhaust emissions of alternative diesel fuels. The system was composed of a 4-cylinder diesel engine (60 kW), water-brake dynamometer (294.2 kW), fuel stand, 5-gas emission analyzer, two computers, a data acquisition system, and various sensors to measure the engine performance parameters. The fuel stand allowed for changing the direction of the fuel supply between the diesel fuel tank and the alternative fuel tank, and measured the instantaneous fuel consumption. The data on engine performance, fuel consumption, and exhaust emissions were monitored and recorded as a text file for analyses and comparisons. The elements of the engine system and fuel test procedure were demonstrated to 40 students during the testing of biodiesel-diesel fuel blends. The students' knowledge of the diesel engine test system components and fuel test procedure were evaluated through a survey instrument administered before and after the laboratory demonstrations. The survey results indicated that the engine test stand was effective in demonstrating to college students the significant parameters for the evaluation of alternative fuels.