In the present research, an innovative oscillatory slug flow reactor (OSFR) under the treatment of gas–liquid phase pulsed discharge plasma was developed for biodiesel production. The main goal was continuous production of high quality biodiesel at low temperature and pressure. Experimental tests were carried out under the influence of four main operating parameters including applied voltage, molar ratio, reactant flow rate, and catalyst concentration. The response surface method was employed to optimize experimental tests. The results showed that the proposed technology provided 94% production efficiency under the optimal conditions of voltage 19.4 kV, molar ratio 6.4, flow rate 2.7 ml/s, and catalyst 0.9 wt. %. According to the statistical analysis, increasing the applied voltage and reducing the flow rate have a strong effect on the Fatty Acid Methyl Ester yield, while the concentration of potassium hydroxide and methanol have less effect on the overall efficiency. In addition, the characteristics of the produced biodiesel were in accordance with ASTM D6751 standards. Surprisingly, the optimal energy consumption in this system was 95 kJ/l, which is more economically viable. In general, this study showed that the combined system of gas/liquid phase plasma in the OSFR reactor has a high synergistic potential for the transesterification reaction.