The characterization of pyrolysis oil obtained from mixed waste plastics and its utilization in a compression ignition engine were investigated. The chemical compositions and physicochemical properties of distilled waste plastic oil (WPO) and crude waste plastic oil (CWPO) were analyzed. The experiment was conducted with a variable compression ratio diesel engine at various loads and compression ratios to evaluate combustion characteristics, exhaust emissions, and engine performance. The experimental results show that CWPO contains the highest percentage of carbon atoms in the C4–C11 group, while WPO contains the highest percentage of carbon atoms in the C12–C20 group, similar to the main compositions of diesel fuel. According to the preliminary study in chemical compositions and physicochemical properties, WPO and diesel fuel were selected for the engine test at different compression ratios of 16, 17, and 18 and different engine operating loads of 25%, 50%, and 75% of maximum engine torque at an engine speed of 1500 rpm. It was found that increasing the engine operating load and the compression ratio tends to increase the brake thermal efficiency. Increasing the compression ratio results in a significantly shorter delay time in a combustion state. A lower cetane index and a higher percentage of long chain carbon compounds (C12–C20) could be the main factors affecting higher NOx, CO, and HC emissions with the combustion characteristics of WPO, compared to diesel fuel. The disadvantage of emissions by the use of WPO can be alleviated when the engine is running at maximum load and a high compression ratio.