In biodiesel production, cost of chemicals is usually of concern and any amount of reduction would be welcomed. Inferior inputs, such as waste vegetable oils (WVOs), if can be upgraded through a suitable process would bring about additional benefits. In this research, a 'novel' two-step esterification process plus catalyst solution recycling on WVO having high free fatty acid (FFA) content was developed in an effort to reduce usage of chemicals. In the first step esterification, FFA was esterified by methanol (MeOH) employing sulfuric acid (H2SO4) catalyst. In the second step, the MeOH-rich phase was recycled back as catalyst solution to the first step esterification. The final FFA concentration was 0.53 wt.% which is within the recommended standard of 1 wt.%. The optimum condition used in the final methanol-and-acid-recycle experiment was investigated from a three-set experiment: first esterification stand-alone; second esterification stand-alone; and conventional two-step esterification, and material balances. The advantage of this novel two-step esterification process plus catalyst solution recycling over a normal conventional two-step method is a 27% reduction in methanol consumption and a 23% reduction of sulfuric acid. Inferior quality WVOs can thus be potential low-cost feedstocks in biodiesel production using this process.