Biodiesel is used as an alternative fuel or fuel additive in diesel engines. In the literature, engine performance, exhaust emission, and thermodynamic analyses have been conducted using biodiesel, diesel–biodiesel, diesel–biodiesel–alcohol, and diesel–biodiesel–nanoparticle fuel blends as alternative fuels in diesel engines. The present research examined and discussed only studies related to energy and exergy analyses. Using energy efficiency, exergy efficiency, and destroyed exergy values, a distinct perspective has been given to using biodiesel as an alternative fuel. While a certain decrease occurs in engine power with biodiesel, an improvement is observed in engine emissions. Hence, the exergy efficiency of biodiesel fuel blends is lower than pure diesel fuel. Some studies in the literature have reported exergy destruction due to the use of biodiesel to be 5–15% higher than pure diesel fuel.The exergy efficiency of some biodiesel types is very low compared to diesel fuel. When nanoparticles such as Al2O3 and TiO2 are added to diesel–biodiesel fuel blends, exergy destruction in the engine decreases and, thus, the useful work increases. Whereas nanoparticles ensure a 2–5% power increase in diesel–biodiesel blends, they cause exergy destruction to decrease at the same rate. This study reviewed in detail the effects of using biodiesel fuels in diesel engines on energy and exergy performance and aimed to contribute to researchers working in this field.