Biodiesel production has received considerable attention in the recent past as a biodegradable and nonpolluting fuel. Jatropha oil containing 20 % saturated and 80 % unsaturated fatty acids, represents a potential source for producing biodiesel. Recently, enzymatic transesterification has attracted much attention for biodiesel production as it produces high purity product and enables easy separation from the byproduct, glycerol. Lipases (triacyl glycerol acylhydrolase EC 3.1.1.3) are hydrolytic enzymes that catalyze the hydrolysis and synthesis of variety of acylgcerols at interface of lipid and water. In the present study transesterification reaction of jatropha oil was carried out by using cold- active crude lipase and immobilized crude cold active lipase in a solvent free system. The effect of various parameters such as enzyme concentration, molar ratio, water content and temperature were optimized. A crude cold – active lipase concentration of 30 % (based on oil wt.), molar ratio of 1:4 (oil: methanol) and temperature 15-25 oC were found to be optimized for the production of biodiesel. Immobilized of crude lipase on sodium alginate enhanced conversion of fatty acid 92 %, time 48 h at 15 0C. The biodiesel obtained was qualitatively determined by thin layer chromatography. This approach might pave the way for industrial production of biodiesel equivalents from renewable resources by employing micro – organism, enabling a broader use of biodiesel – like fuel in the future