Nano-AlO derived from recyclable sources emerges as a promising sustainable solution for enhancing diesel engine efficiency while mitigating emissions. However, a lack of an in-depth understanding of the health hazard aspect still challenges its commercial applications. To this end, nano-AlO/diesel (NAD) blends prepared via ultrasonic homogenization were experimentally and analytically investigated under various injection timings and excess air coefficients to explore the potential of nano-AlO for balancing energy performance and emissions. Results revealed a synergistic effect between the NAD blends and optimized combustion control strategies. NAD blends presented enhanced heat release and pressure rise rates even under late injection or hypoxic conditions, indicating a faster and more complete combustion. Specifically, NAD blends promoted the partially premixed combustion phase and reduced postcombustion duration. While a slight increase in fuel consumption and a decrease in thermal efficiency were observed, potentially due to minor chamber compatibility issues, a significant improvement in emissions was identified. NAD blends effectively mitigated the well-known soot-particulate number-nitrogen oxide (NOx) trade-off inherent in diesel engines. NAD blends achieved lower NOx emissions through the even temperature distribution promoted by nano-AlO, minimizing the formation of NOx precursors. Simultaneously, NAD blends contributed to a reduction in soot emissions as well as an increment in nucleation mode particles, which are smaller and more harmful than conventional engine-out particulates. Notably, deposition modes highlighted that a higher nano-AlO addition leads to an increase in nucleation mode particles, resulting in a higher alveolar deposition ( = 5-100 nm) and lower nasal deposition ( = 200-800 nm). These findings suggest that, by optimizing injection timing and excess air coefficients, NAD blends offer a promising approach to enhance combustion and achieve cleaner emissions simultaneously, making them a valuable contribution to the development of more sustainable diesel engine technologies.