The production of biodiesel by esterification with ethanol using waste oil generated in the refining of coconut oil was investigated in this study. The reaction was performed with and without adsorption of water in order to verify the effect of removing water on the reaction conversion. Methanol was also evaluated as an esterification agent. For both ethanol and methanol, conversions over 99% mol were observed. Simultaneous water adsorption allowed the use of lower alcohol/oil molar ratios thus enabling better economics to a possible industrial process. (C) 2010 Elsevier Ltd. All rights reserved.