Continuous use of petroleum intensifies air pollution which increases global warming. As per environmental stringent, crude oil prices and depletion of fossil fuels (like petroleum, coal and natural gas) many researchers are looking forward to find an alternative source of renewable energy. As biodiesel is promising as a renewable source from the feed stocks like vegetable oils, animal fats and fried cooking oil, prepared by a common and most satisfactory way of producing maximum yield at low cost through transesterification process. In general vegetable oils are of two types. They are edible and non-edible oils. Out of all varieties of oils, waste cooking oil and non-edible oils (second generation feed stocks) are more preferably considered for biodiesel production without diminishing useful resource for mankind and to minimize fuel cost. The major parameters of producing biodiesel using transesterification process depends on free fatty acids (FFA) content, molar ratio, catalyst concentration, reaction temperature, reaction time and moisture content. Biodiesel is derived from mono alkyl esters of free fatty acids produced from animal fats or vegetable oils with small chain alcohols in the presence of catalyst. This review concerns about the factors affecting the biodiesel production and various methods to its production using 2nd generation feed stocks.