Each year, large quantities of waste cooking oils are produced worldwide which are currently reused mainly for biodiesel production. Since lipids have a very high potential for biomethanation, the production of biogas is a possible alternative for the recycling of edible used oils. The digestion of fats is hindered mainly by their hydrophobicity, which implies a biphasic system with problems of floating and foaming of the oily materials, and by the accumulation of long-chain fatty acids, which are toxic to microbial consortia. The objectives of this review were to highlight the recycling potential of waste cooking oil to biogas production and to facilitate the application of the technology by identifying solutions to overcome biological and engineering limits to its diffusion. Particular attention was paid to the microbial populations involved, to the process factors whose control is important to improve the digestion of fats such as lipid concentration, pH, temperature, and agitation, and to technological solutions whose application also aims to improve digestion, such as pretreatment of raw materials and co-digestion of fats with other feedstocks. The state of the art in reactor designs suitable for lipid digestion was also examined.