Elevated concern on energy security led to the quest for alternative sources that can replace petroleum dependence to some extent because of their depleting supplies and the significant contribution they make for envi-ronmental deterioration. Biofuels are one such alternative that has been emphasized by various countries as a fuel for the future. They are like any other fuel that is derived from biological sources. Wood, charcoal, dung and plant based oils (used as fuel) are some examples of conventional sources for biofuel synthesis. Recent emphasis has been on plant-based oils that can be used to supplement petroleum fuels. In transesterification reaction for knowledge about the nature of raw material, chemical composition of substrate, and the mode of transesterification is of signifi-cant importance. This review covers some of the aspects of current scenario of world for energy consumption and dependency followed by alternatives to address this issue. Besides this, the review also includes preliminary perqui-sites prior to transesterification reaction and mode of analysis of products. Special attention has been given to biocatalytic mode using enzyme such as lipase for biodiesel production. Different benefits which biodiesel offers and its impact on environment is also discussed. In overall the review present significant informationrelated to biodiesel status as an alternative fuel.