Abstract: The energy security concern and rapidly diminishing fossil fuel resources demand the development of renewable and economically attractive fuel for reciprocating engines. Methanol is a promising renewable alternative fuel. Numerous studies have been carried out to explore the various aspects of the utilization of methanol in compression ignition (CI) engine. This review paper presents a detailed analysis of the effect of methanol on performance, combustion, and emission (NO, CO, HC, and soot) characteristics of conventional CI-engine along with dual-fuel combustion mode. This study focuses on methanol utilization in dual-fuel mode, which is an advanced engine combustion mode. First, methanol production and solubility issues of methanol in diesel are briefly discussed. This study discusses the soot and nano-particle emission from the methanol fueled CI-engine, which is one of the main concerns in the current emission legislation. It was found that the utilization of methanol in CI-engine has the potential to improve the performance and simultaneously with a significant reduction in NO, CO, soot, and nano-particle emissions in comparison to neat diesel operation. However, unburnt HC emission reduces for methanol-diesel blended fuel operation whereas HC emissions are higher for methanol-diesel dual-fuel operation.