Energy is necessary for human beings existence, which supports for the modernization of the community. Biomass has been one of the main energy sources of mankind ever since the dawn of civilization, though its significance subsided after the Second World War due to the cheaper and easily useable fossil fuels (oil and gas). In developing countries, biomass is a main source of energy in rural areas. Mostly the biomass is burned open to the atmosphere to get heat energy, which lost a huge amount of energy and also increases the air pollution. Due to the depletion and excessive use of fossil fuel resources, the prices of petroleum products are increasing day by day. In Pakistan, agriculture sector is suffer very badly due to unavailability and high cost of energy as the major source of farm power are diesel engines and tractors, which increases the cost of production. Gasification is the most reliable and best alternate to get the energy from the biomass. Gasifiers are the reactors which converts the solid fuels into the gaseous fuels. The biomass can easily be converted into useful gas which can be used to run engines comprehensively. Keeping these points in mind, a research study was carried out at the workshop, Department of Farm Machinery and Power, University of Agriculture, Faisalabad, Pakistan. In this study, complete small scale gasification system was designed and fabricated to run 15 to 18.64 kW (20-25 hp) diesel engine for tube well to reduce the cost of operation. Downdraft and updraft type gasifiers were designed and fabricated for the production of producer gas. A conditioning unit (cooling and cleaning units) was also fabricated for upgrading producer gas to internal combustion engine quality fuel. The whole system was then evaluated for its performance with different aspects. Completely randomized design (CRD) was used to statistically analyze the collected data. The average gas produced in the downdraft gasifier was found to be 74.26 m3 and in updraft gasifier was 69.72m3 with same (30 kg) quantity of different biomass fuel. The data revealed that in downdraft gasifier, 2.64 m3/kg, 2.21 m3/kg and 2.58m3/kg of producer gas was produced from charcoal, corncobs and coal respectively. While the burning of ricehusk, ricehusk + saw dust and saw dust produced 2.13 m3/kg, 2.30 m3/kg and 2.54 m3/kg producer gas respectively in updraft gasifier. The engine running time (hours) was recorded 1.96, 1.61, 1.91, 1.66, 1.78 and 1.90 with charcoal, corncobs, coal, ricehusk, ricehusk + sawdust and with sawdust respectively. The downdraft gasifier produces less tar contents as compared to the updraft gasifier. The cooling and cleaning efficiency of newly fabricated conditioning unit was 84 % and 98 % respectively. The gas produced was used to run a xvi 15 kW single cylinder diesel engine with dual fuel (25% diesel and 75% producer gas) at rated rpm successfully. The cost analysis shows that it is economically beneficial to run engine on dual fuel mode as compared to use diesel only.