An ever increasing demand of fuels has been a challenge for today's scientific workers. The fossil fuel resources are dwindling day by day. Biodiesel seems to be a solution for future. Biodiesel is an environmentally viable fuel. Out of the four ways viz. direct use and blending, micro-emulsions, thermal cracking and transesterification, most commonly used method is transesterification of vegetable oils, fats, waste oils, etc. Latest aspects of development of biodiesel have been discussed in this work. Yield of biodiesel is affected by molar ratio, moisture and water content, reaction temperature, stirring, specific gravity, etc. Biodegradability, kinetics involved in the process of biodiesel production, and its stability have been critically reviewed. Emissions and performance of biodiesel has also been reported. (C) 2008 Elsevier Ltd. All rights reserved.