The research study was conducted to produce biodiesel from Karanja oil (Pongamia pinnata) to evaluate the performance and compare the efficiency of samples involving conventional diesel, B10(10% biodiesel and 90% conventional diesel), B10MgO5(10% biodiesel, 85% conventional diesel and 5% Magnesium Oxide), and B10MgO10(10% biodiesel, 80% conventional diesel and 10% Magnesium Oxide), tested with the diesel engine. The production process undergoes a two-step transesterification process since the free fatty acid (FFA) percentage is more than 4%. The titration process reduces the FFA by using Ethanol and Potassium Hydroxide (KOH). Apart from that, the pre-treatment of oil for acid and base transesterification use methanol as a reactant with the presence of Sulfuric Acid and Sodium Hydroxide ((NaOH) as a catalyst. Moreover, Karanja Biodiesel undergoes three characterization tests: Bomb Calorimeter Test, Fourier Transform Infrared Spectroscopy (FT-IR), and Diesel Engine Performance Testing. From the Bomb Calorimeter test, the highest calorific value was recorded by conventional diesel with 45.5815 MJ/kg, followed by B10MgO10 and B10MgO5. While the smallest value was obtained by B10 with 38.7741 MJ/kg. The inclusion of MgO as an additive increases the calorific value for biodiesel. Throughout FT-IR analysis, four fuel samples were evaluated from the wavelength range from 600 to 4000 . The oxidation process that happens due to the presence of magnesium oxide introduces a new bond at the B10MgO5 and B10MgO10 that is the O-H bond. Meanwhile, the performance of the diesel engine is analyzed at the speed of 1400 rpm until 2200 rpm with an interval of 200 rpm. Conventional diesel has a higher brake horsepower (BHP) value at the speed of 2200 rpm. While Karanja biodiesel with 10% Magnesium Oxide as additives has a greater BHP value among other samples from the speed of 1400 to 1600 rpm. Next, the addition of MgO reduces fuel consumption in the blended Karanja biodiesel samples.