Biodiesel can be considered as the optimum alternative fuel for diesel fuel in Iran. Biodiesel is an environmentally friendly fuel and has the potential to provide comparable engine performance results. The biodiesel production potential from oil seeds such as canola, soybean, cotton, seasem, olive, sunflower, safflower, almond, corn, coconut, walnut and hazelnut in Iran is investigated in this paper. In Iran, oil seeds are not commonly used for energy application. This is because; more than 90% of the edible oil for human consumption is being imported. To contribute to the fuel supply, renewable energies such as oil seeds to be an attractive resource for biodiesel production, this paper aims to cover several perspectives on the size of the biodiesel oil seeds resource in Iran. Oil seeds are harvested every year in Iran. Around 1 million ha of land from 20 states are estimated to be potential land for growing of oil seeds. There are approximately 3.67MT (million ton) of oil seeds crops in Iran that can potentially produce 721ML (million liter) of biodiesel every year. Canola, cotton and soybean are the most favorable biodiesel production source. Based on the results, it can be concluded that production of biodiesel from the seed oils can ideally replace about 2% of total diesel fuel consumption in Iran. By managing this, an B2 (2% biodiesel and 98% diesel) can be an optimum alternative fuel for compressed ignition engine since there is no major engine modification required to use biodiesel.