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Presently the world's energy needs are met through non-renewable resources such as petrochemicals, natural gas and coal, with the exception of Hydroelectricity and nuclear energy. Diesel fuels have the essential function in the industrial economy of a developing country and are used for transport of agricultural and industrial goods. The high energy demand in the industrial world as well as in the domestic sector and pollution problems caused due to the widespread use of fossil fuel make it necessary to develop the alternate energy from renewable sources with lesser environmental impact than traditional one. Thus, an alternate energy must be from a fuel which must be technically feasible, economically competitive, environmentally acceptable and readily available. One possible alternative is the use of oils of plant origin, which is termed as Biodiesel. It is a biodegradable, non-toxic, domestic resource thereby relieving reliance on petroleum fuel imports. It also has more favorable combustion emission profile, such as low emission of CO, particulate matter and unburned Hydrocarbon. CO2 produced by combustion of Biodiesel can be recycled by photosynthesis, thereby minimizing the impact of Biodiesel combustion on the green house effect. Though the heating value of Vegetable oil is similar to that of diesel fuel, their use in Direct Injection diesel engine is restricted by the physical properties like viscosity which is approximately 10 times higher than diesel fuel thereby creating poor fuel atomization, incomplete combustion, carbon deposition on the injector, fuel buildup in the lubricant oils resulting in serious engine fouling. These problems may be alleviated by employing various treatments like dilution with a suitable solvent, emulsification, pyrolysis and Transesterification. Transesterification is a common well established chemical reaction in which linear monohydroxyl alcohols reacts with vegetable oils which are triglycerides of fatty acids, in- - the presence of a catalyst. It is actually the replacement of alcohol group from an ester by another alcohol. Alkali catalyzed transesterification is considered to be the best amongst all methods available for the production of biodiesel from fresh oil. In the present investigation an attempt has been made to use mutton fat as low cost sustainable potential feed stock for biodiesel production. Effect of various process parameters such as amount of catalyst, temperature, amount of methanol and reaction time on biodiesel production was investigated. The optimal conditions for processing 50 g of mutton fat were obtained. Under optimal conditions, the yield of mutton fat methyl esters was 93.2%. The fuel properties like Density, kinematic viscosity, acid value, cloud point, iodine value, saponification value, pour point and cetane value was estimated. Mutton fat was found to be highly suitable to produce biodiesel with recommend fuel properties.