In recent years biodiesel has drawn considerable amount of attention as a clean and renewable fuel. Biodiesel is produced from renewable sources such as vegetable oils and animal fat mainly through catalytic or non-catalytic transesterification method as well as supercritical method. However, as a consequence of disadvantages of these methods, the production cost increases dramatically. This article summarizes different biodiesel production methods with a focus on their advantages and disadvantages. The downstream and upstream strategies such as using waste cooking oils, application of non-edible plant oils, plant genetic engineering, using membrane separation technology for biodiesel production, separation and purification, application of crude glycerin as an energy supplement for ruminants, glycerin ultra-purification and their consequent roles in economizing the production process are fully discussed in this article. (C) 2010 Elsevier Ltd. All rights reserved.