Biodiesel is a low-emissions diesel substitute fuel made from renewable resources and waste lipid. The most common way to produce biodiesel is through transesterification, especially alkali-catalyzed transesterification. When the raw materials (oils or fats) have a high percentage of free fatty acids or water, the alkali catalyst will react with the free fatty acids to form soaps. The water can hydrolyze the triglycerides into diglycerides and form more free fatty acids. Both of the above reactions are undesirable and reduce the yield of the biodiesel product. In this situation, the acidic materials should be pre-treated to inhibit the saponification reaction. This paper reviews the different approaches of reducing free fatty acids in the raw oil and refinement of crude biodiesel that are adopted in the industry. The main factors affecting the yield of biodiesel. i.e. alcohol quantity, reaction time, reaction temperature and catalyst concentration, are discussed. This paper also described other new processes of biodiesel production. For instance, the Biox co-solvent process converts triglycerides to esters through the selection of inert co-solvents that generates a one-phase oil-rich system. The non-catalytic supercritical methanol process is advantageous in terms of shorter reaction time and lesser purification steps but requires high temperature and pressure. For the in situ biodiesel process, the oilseeds are treated directly with methanol in which the catalyst has been preciously dissolved at ambient temperatures and pressure to perform the transesterification of oils in the oilseeds. This process, however, cannot handle waste cooking oils and animal fats. (C) 2009 Elsevier Ltd. All rights reserved.