Biodiesel, defined as the mono-alkyl esters of vegetable oils or animal fats, is an environmentally attractive alternative to conventional petroleum diesel fuel (petrodiesel). Produced by transesterification with a monohydric alcohol, usually methanol, biodiesel has many important technical advantages over petrodiesel, such as inherent lubricity, low toxicity, derivation from a renewable and domestic feedstock, superior flash point and biodegradability, negligible sulfur content, and lower exhaust emissions. Important disadvantages of biodiesel include high feedstock cost, inferior storage and oxidative stability, lower volumetric energy content, inferior low-temperature operability, and in some cases, higher NOx exhaust emissions. This review covers the process by which biodiesel is prepared, the types of catalysts that may be used for the production of biodiesel, the influence of free fatty acids on biodiesel production, the use of different monohydric alcohols in the preparation of biodiesel, the influence of biodiesel composition on fuel properties, the influence of blending biodiesel with other fuels on fuel properties, alternative uses for biodiesel, and value-added uses of glycerol, a co-product of biodiesel production. A particular emphasis is placed on alternative feedstocks for biodiesel production. Lastly, future challenges and outlook for biodiesel are discussed.