Due to diminishing petroleum reserves and the deleterious environmental consequences of exhaust gases from fossil-based fuels, research on renewable and environmentally friendly fuels has received a lot of impetus in recent years. With oil at high prices, alternate renewable energy has become very attractive. Many of these are eco-friendly. Besides ethanol, other unconventional choices are: biodiesel made from non-edible sources or waste cooking oil that can be blended with diesel; biobutanol; and gas-to-liquids from the abundance of natural gas, coal, or biomass. In this paper, we examine advances made in research on biodiesel. Current research on the synthesis of biodiesel can be classified into five areas: (i) the source of substrates, namely triglyceride and acyl-acceptors, (ii) reaction mechanism, (iii) catalysts for transesterification, including the application of inorganic base and acid catalysts as well as biocatalysts, (iv) solvent effects on biodiesel synthesis, especially in enzyme-catalyzed processes, and (v) operations and reactors involving traditional batch reactors, continuous reactors, novel membrane reactors and micro-channel reactors. Each of these areas is reviewed in this paper.