In this work, Mahua vegetable oil in the presence of red mud as a catalyst for the preparation of bio-diesel is investigated. The cracking process is carried out in a reactor chamber maintained at a temperature of 65 degrees C in order to obtain biodiesel. The product obtained after the cracking process is evaluated for physio-chemical properties such as flash point, fire point, calorific value, and specific gravity, and the obtained values were compared with neat diesel. The biodiesel is then blended with diesel fuel on volume basis such as B25, B50, B75, and B100. The experiment was carried out in a single cylinder, water cooled DI diesel engine to study the emission characteristics. The results revealed that the use of red mud as a catalyst increases the fuel property and reduces the effect of environmental pollution. This method of biodiesel preparation is very much cost effective and the use of red mud as a catalyst further decreases the cost of biodiesel compared to neat diesel.