The feasibility of fatty acid methyl ester ( FAME) as a co-solvent used to increase the mass transfer between oil and methanol was investigated. FAME, as the co-solvent, does not require additional separation after the reaction because it is the end product of the reaction. To examine intermediate phenomena during the transesterification of soybean oil, the agitation speed was controlled at a slow rate. When the molar ratio of oil to methanol was 1: 6 at 0.8wt.% of KOH to oil, oil was at the bottom layer, and methanol and the catalyst were at the top layer. Under the slow agitation process, the contact surface became initially darkened with the production of FAME and glycerol. After a few minutes, the entire top layer became dark. The top layer, containing methanol, KOH, FAME, and glycerol, fell to the bottom layer and then formed the one-phase system. When 0, 5, and 10 wt.% of FAME to oil was initially introduced to the reaction mixture, the FAME content rapidly increased with the FAME concentration level. After forming the one-phase system, the rate of increase of the FAME content was very slow. The time required for the formation of the one-phase system decreased with the amount of FAME and KOH and with temperature.