The effect of the phase behavior of the multicomponent transesterification reaction between soybean oil triglycerides and methanol catalyzed by homogeneous potassium hydroxide over a wide range of methanol/triglyceride molar ratios was studied. It has been known that increasing the molar ratio results in increased methyl ester yields; this is normally attributed to the reaction kinetics. In the subsequent investigation, however, it is shown that the cause of the incomplete yields at low molar ratios results from inhibitory effects caused by the byproduct glycerol. As it has previously been shown that the methanol phase acts as the primary reaction volume, it is thought that, as the glycerol concentration in the methanol phase increases as the reaction progresses, triglycerides become excluded from the methanol phase and the reaction drastically slows, hence, byproduct inhibition. At increased methanol/triglyceride molar ratios, the excess methanol acts to dilute the concentration of glycerol and, subsequently, reduce the inhibitory effects, resulting in increased yields. A kinetic model incorporating the effects of product inhibition is therefore proposed.