In this study, characteristics and use of biodiesel was concluded as alternative engine fuel. Biodiesel is one product of the chemical reaction of an alcohol with a vegetable oil or animal fat (the other product being glycerol). It is biodegradable and nontoxic, has low emission profiles and so is environmentally beneficial. A number of technical advantages of biodiesel fuel: (1) it prolongs engine life and reduces the need for maintenance (biodiesel has better lubricating qualities than fossil diesel), (2) it is safer to handle, being less toxic, more biodegradable, and having a higher flash point, and (3) it reduces some exhaust emissions (although it may, in some circumstances, raise others). The cost of biodiesel is higher than diesel fuel. Currently, there are seven producers of biodiesel in the United States. Pure biodiesel (100%) sells for about $1.50 to $2.00 per gallon before taxes. Fuel taxes will add approximately $0.50 per gallon.