Biodiesel has caught the attention of many researchers because it has great potential to be sustainable fossil fuel substitute. Biodiesel has non-toxic and renewable nature and has been proven to emit less amount of environmentally harmful emissions such as hydrocarbons (HC), and carbon monoxide (CO), as well as smoke particles during combustion. Problems related to global warming caused by greenhouse gas (GHG) emissions could also be solved by utilizing biodiesel as a daily energy source. However, the expensive cost of biodiesel production, mainly because of the cost of natural feedstock, holds the potential of biodiesel commercialization. The selection of natural sources of biodiesel should be made with observations from economic, agricultural, and technical perspectives to obtain one feasible biodiesel with superior characteristics. This review paper presents a detailed overview of various natural sources, their physicochemical properties, as well as the performance, emission, and combustion characteristics of biodiesel when used in a diesel engine. The recent progress in studies about natural feedstocks and manufacturing methods used in biodiesel production were evaluated in detail. Finally, the findings of the present work reveal that transesterification is currently the most superior and commonly used biodiesel production method compared to other methods available.