The world at present is caught between two major crisis emerging out of fossil fuel depletion and environmental degradation. Thus it has become essential to identify clean-burning alternative fuels - not only to retain the present growth rate of civilization, but also to protect the earth from the obnoxious pollutants. The problem is of significant concern in our country where consumption of diesel oil is almost about seven times more than that of petrol. Diesel oil in India is the main fuel in the public transportation system, in mechanized agricultural system including the irrigation and water pumping and in several decentralized energy units. Hence, it is essential that alternatives to diesel fuel are to be developed on assessing the viability of using Bio-Diesel in the existing diesel engines. An acceptable alternative fuel for use in engines should fulfill the environmental and energy security needs without sacrificing the operating performance.