Biofuels are fuels produced from hydrocarbon-rich living organisms (biomass) — such as plants or microalgae — by thermal, chemical or biochemical conversion processes. As with fuels, biofuels such as biodiesel, biogas, and syngas are combusted to generate energy. Biofuels derived from food crops, wood, grass, algae, and other biological matter and agricultural byproducts, offer promising alternatives to fossil fuels. It’s absolutely essential to keep advancing biofuels because biofuels can play a wider role in reduction of fossil fuels and help reduce all the issues that have come up because of fossil fuels, including fluctuating oil prices, peak oil scenario, and the reality that fossil fuels may not be here forever, as well as the environmental and health impacts of fossil fuels. Bio-diesel production is rising day-by-day basis in India as well as foreign countries. The major reason behind the phenomena is the limited amount of petroleum product reservoirs. The increasing industrialization and motorization of the world have led to a steep rise in the demand for petroleum-based fuels. Petroleum-based fuels are obtained from limited reserves. These finite reserves are highly concentrated in certain regions of the world. Those countries not having these resources are facing energy/foreign exchange crisis, mainly due to the import of crude petroleum. Hence, it is necessary to look for alternative fuels which can be produced from resources available locally within the country such as alcohol, biodiesel, vegetable oils etc. This paper reviews the production, characterization and current statuses of vegetable oil and biodiesel as well as the experimental research work carried out in various countries.