Karanj oil having high free fatty acid was neutralized with a dilute alkali solution and then mixed with soybean oil in different ratios in order to reduce the free fatty acid content significantly. The mixture of the oils was then transesterified with methanol to produce fatty acid methyl ester. The transesterification was carried out using ultrasonication energy of 20 kHz in pulse mode. It was found that up to 60% Karanj oil in the blended mixture could produce good quality biodiesel that met the ASTM standards. However, the lesser content of Karanj oil in the mixture, the lesser the reaction parameters viz. alcohol to oil molar ratio, catalyst concentration, and reaction time. About 99% yield of methyl esters was obtained when the Karanj oil content in the mixture was 20% with a reaction time of 30 min, catalyst concentration 1 wt%, and a temperature of 55 degrees C.