Biodiesel was produced from canola oil and methanol in a novel membrane reactor. The membrane in the reactor served to separate the unreacted emulsified oil from the product stream, producing high-purity fatty acid methyl ester (FAME). The effects of the pore size of the membrane used in the semicontinuous reactor and the initial methanol/canola oil loading were studied. Four carbon membranes having different pore sizes of 0.05, 0.2, 0.5, and 1.4 mu m were tested, with four different initial methanol volume fractions (phi(1)) of 0.29, 0.38, 0.47, and 0.64. It was found that all four membranes retained canola oil in the reactor. Permeate was observed at the 0.38, 0.47, and 0.64 initial methanol volume fractions, whereas it was not observed at phi(1) = 0.29. The initial oil loadings represent methanol/oil mole ratios of 11:1, 16:1, 23:1, and 46:1. For all runs, no triglycerides were found in the permeate. The permeate dephased upon cooling to room temperature. Glycerol was not detected in the FAME-rich phase. This opens the possibility of reaching methanol/oil mole ratios of 6:1 with a single recycling step.