<p>The injection system parameters, namely injection timing and nozzle-opening pressure, significantly affect the engine emissions, performance, entropy generation, and exergy characteristics. In this experimental work, the impacts of these parameters are comprehensively studied. An orthogonal array based on the Taguchi methodology has been applied to design and minimize the number of experiments. The input parameters, namely biodiesel blend, engine speed, load conditions, nozzle opening pressure, and injection timing, are considered. The influence of injection parameters on the exergy performance of the engine is also examined and presented. In the present investigation, brake-specific fuel consumption (BSFC), brake thermal efficiency, NO, HC, CO, exergetic efficiency, exergy destruction percentage, and entropy generation are considered as the response variables. The Taguchi-grey relational analysis approach is applied for multi-objective optimization. The experimental grey relational grade (GRG) was compared with the predicted value to validate the experimental results. The comparison showed a strong correlation between the predicted and experimental GRG values at the optimal combination of the input parameters. Exergetic efficiency is improved by 18.58%, and entropy generation is reduced by 40% at optimum engine operating parameters. Hydrocarbon and NO_<i>x</i> emissions are reduced by 28 and 57%, respectively. A high thermal efficiency of 34.29% and an exergetic efficiency of 32.56% are obtained. Reduction in emission characteristics is observed at optimum parameter levels.</p>