Denatured anhydrous and aqueous ethanol of 200°, 190°, 180°and 170° proof has been burnt in a constant speed SI engine designed to operate on kerosene. The effect of water content in the fuel on engine exhaust emissions has been studied. The emission of carbon monoxide is found to be 14.0%-23.7% lower and a decrease in unburnt hydrocarbon emission from 99% to 29% is observed on denatured ethanol of different proofs as compared to that observed on kerosene. The emission of NOx is found to be higher on denatured ethanol of different proofs. However, it is comparable with kerosene when engine is operated on 170° proof ethanol.