Biodiesel is one of the alternative fuels which derive from straight or used vegetable oils and animal fats. In this book, waste oil and fat were used to produce biodiesel. It was found that the conversion yield of biodiesel from waste oil is higher than that of animal fats. The biodiesel produced having lower gross heating value and viscosity compare to diesel fuel. Short-term engine performance tests were carried out using indirect injection (IDI) diesel engine fuelled with different fuels. Biodiesel blends produced higher brake power (kW) and BSFC (mL/kW), but lower engine power output (kW) as compare to normal diesel. The emission of CO, HC and NOx reduced as biodiesel blend percentage increase over engine speed range. Conversely, the power output decreased with blending percentage due to the lower energy content of the biodiesel compared to conventional diesel.