Biodiesel refers to a vegetable oil- or animal fat-based diesel fuel consisting of long-chain alkyl (methyl, propyl or ethyl) esters. Biodiesel is typically made by chemically reacting lipids (e.g., vegetable oil, animal fat (tallow)) with an alcohol producing fatty acid esters.

Biodiesel is meant to be used in standard diesel engines and is thus distinct from the vegetable and waste oils used to fuel converted diesel engines. Biodiesel can be used alone, or blended with petrodiesel. Biodiesel can also be used as a low carbon alternative to heating oil.

The National Biodiesel Board (USA) also has a technical definition of "biodiesel" as a mono-alkyl ester.

Blends of biodiesel and conventional hydrocarbon-based diesel are products most commonly distributed for use in the retail diesel fuel marketplace. Much of the world uses a system known as the "B" factor to state the amount of biodiesel in any fuel mix:

Blends of 20% biodiesel and lower can be used in diesel equipment with no, or only minor modifications, although certain manufacturers do not extend warranty coverage if equipment is damaged by these blends. The B6 to B20 blends are covered by the ASTM D7467 specification. Biodiesel can also be used in its pure form (B100), but may require certain engine modifications to avoid maintenance and performance problems. Blending B100 with petroleum diesel may be accomplished by: