This paper presents a detailed analysis on different properties of two kind of animal fats and their suitability of using them as fuel in diesel engines. Initially, the physical and chemical properties (viscosity, low heating value (LHV) and chemical compositions) of animal fats are obtained experimentally. In the second phase of work, the animal fats are modified to form emulsions with water in different quantities. In the last phase, methanol is added to improve the physical properties of emulsions further. On the whole it is concluded that the animal fats can be transformed into a stable biofuel emulsions with improved physical and chemical properties and used as good alternative fuel in diesel engines. An optimum formulation is obtained by mixing 15% of water, 15% of methanol and 2% of surfactant. (c) 2005 Elsevier Ltd. All rights reserved.