The present study uses numerical simulations to explore the use of hydrated (wet) ethanol for reactivity controlled compression ignition (RCCI) operation in a heavy duty diesel engine. RCCI uses in-cylinder blending of a low reactivity fuel with a high reactivity fuel and has demonstrated significant fuel efficiency and emissions benefits using a variety of fuels, including gasoline and diesel. Combustion timing is controlled by the local blended fuel reactivity (i.e., octane number), and the combustion duration can be controlled by establishing optimized gradients in fuel reactivity in the combustion chamber. In the present study, the low reactivity fuel was hydrated ethanol while the higher reactivity fuel was diesel. First, the effect of water on ethanol/water/diesel mixtures in completely premixed HCCI combustion was investigated using GT-Power and single-zone C HEMKIN simulations. The results showed that the main impact of the water in the ethanol is to reduce the initial in-cylinder temperature due to vaporization cooling. Next, multi-dimensional engine modeling was performed using the K IVA code at engine loads from 5 to 17 bars IMEP at 1300 rev/min with various grades of hydrated ethanol and a fixed diesel fraction of the total fuel. The results show that hydrated ethanol can be used in RCCI combustion with gross indicated thermal efficiencies up to 55% and very low emissions. A 70/30 ethanol/water mixture (by mass) was found to yield the best results across the entire load range without the need for EGR.