According to the IEA (International Energy Agency)there will be a need for all alternative fuels for the transport sector, and biodiesel will be one of them. The biodiesel fuel from vegetable oil does not produce sulfur oxide and minimizes the soot particulate one-third time in comparison with the existing one from petroleum. The results of the investigation on transesterification of rapeseed oil and methanol are given in this paper. Transesterification reaction conditions that affect FAME yield and purity of the product esters were examined, including type and concentration of catalysts, molar ratio of methanol to oil, temperature, oil quality and reaction time.