A stabilized diesel/methanol blend was developed and the combustion characteristics and heat release analysis of this blend was carried out in a compression ignition engine. The study showed that the increase in the methanol mass fraction will result in an increase in the heat release rate in the premixed burning phase and shorten the combustion duration of the diffusive burning phase. Ignition delay increases with the increase in the methanol mass fraction and the behaviour is more obvious at low engine load and high engine speed. The rapid-burn duration varies little with the methanol mass fraction and the total combustion duration decreases with the increase in the methanol mass fraction. At a low engine speed, the centre of heat release curve tends to be close to the top dead centre (TDC), with an increase in the methanol mass fraction at all engine loads. Fuel delivery advance angles, the maximum rate of pressure rise and the maximum rate of heat release increase with the increase in the methanol mass fraction. At a high engine speed, the centre of the heat release curve closes to TDC at high engine load and will depart from TDC at low engine load. The maximum rate of pressure rise and heat release gives an increasing trend with the increase of methanol mass fraction at high engine loads. The maximum cylinder pressure increases with the increase of the methanol mass fraction. The presence of oxygen reduces the peak pressure, but the reduction was found to be insensitive to the proportion of oxygen within the 6-11 per cent range of testing.