Due to the increasing air pollution from diesel engines and the shortage of conventional fossil fuels, many experimental and numerical types of research have been carried out and published in the literature over the past few decades to find a new, sustainable, and alternative fuels. Biodiesel is an appropriate alternate solution for diesel engines because it is renewable, non-toxic, and eco-friendly. According to the European Academies Science Advisory Council, biodiesel evolution is broadly classified into four generations. This paper provides a comprehensive review of the production, properties, combustion, performance, and emission characteristics of diesel engines using different generations of biodiesel as an alternative fuel to replace fossil-based diesel and summarizes the primary feedstocks and properties of different generations of biodiesel compared with diesel. The general impression is that the use of different generations of biodiesel decreased 30% CO, 50% HC, and 70% smoke emissions compared with diesel. Engine performance is slightly decreased by an average of 3.13%, 89.56%, and 11.98% for higher density, viscosity, and cetane, respectively, while having a 7.96% lower heating value compared with diesel. A certain ratio of biodiesel as fuel instead of fossil diesel combined with advanced after-treatment technology is the main trend of future diesel engine development.