In this article, the status of fat and oil derived diesel fuels with respect to fuel properties, engine performance, and emissions is reviewed. The fuels considered are primarily the methyl esters of fatty acids derived from a variety of vegetable oils and animal fats, and referred to as biodiesel, The major obstacle to widespread use of biodiesel is the high cost relative to petroleum. Economics of biodiesel production are discussed, and it is concluded that the price of the feedstock fat or oil is the major factor determining biodiesel price. Biodiesel is completely miscible with petroleum diesel fuel, and is generally tested as a blend. The use of biodiesel in neat or blended form has no effect on the energy based engine fuel economy. The lubricity of these fuels is superior to conventional diesel, and this property is imparted to blends at levels above 20 vol%. Emissions of PM can be reduced dramatically through use of biodiesel in engines that are not high lube oil emitters. Emissions of NO(x) increase significantly for both neat and blended fuels in both two-and four-stroke engines. The increase may be lower in newer, lower NO(x) emitting four-strokes, but additional data are needed to confirm this conclusion. A discussion of available data on unregulated air toxins is presented, and it is concluded that definitive studies have yet to be performed in this area. A detailed discussion of important biodiesel properties and recommendations for future research is presented. Among the most important recommendations is the need for all future studies to employ biodiesel of well-known composition and purity, and to report detailed analyses. The purity levels necessary for achieving adequate engine endurance, compatibility with coatings and elastomers, cold flow properties, stability, and emissions performance must be better defined. (C) 1998 Elsevier Science Ltd. All rights reserved.