Limitations in energy crisis and environment protection promote the development of engine lubricants. By friction machine and AVL diesel engine bench, the present investigation studies the tribological properties and dynamic performance of diesel engine with lubricants of commercial quality dispersed with different mass concentrations of nanodiamond particles. Reverse dragging process tests and mapping characteristics tests were brought in the bench test. Additionally, investigations were conducted using viscometer, thermal conductivity meter, scanning electron microscopy (SEM), and transmission electron microscope (TEM) to interpret the possible influence mechanisms of tribology and thermal conduction with nanodiamond particles. The friction machine experimental results show that lubricants dispersed with nanodiamond particles exhibit good friction-reduction and antiwear properties. The engine bench tests indicate that it has a desirable effect on engine performance, decreasing the mechanical loss while increasing fuel economy.