Concern over high transportation fuel costs, trade deficits, depleting resources, energyrnsecurity, and mounting evidence of global climate change has led to re-investigation ofrnfossil fuel alternatives. For this reason Ethiopian Ministry of Water and Energy hasrnstarted promoting bio-energy as a means to transform the nationâ€™s abundant renewablernbiomass resources into cost competitive, high power biofuels and products. Biodieselrnoffers one renewable fuel option that can be produced from non edible vegetable oilrnsources. Fortunately Ethiopia has many opportunities for biodiesel production. TherncountryÂ´s favorable climatic condition for the cultivation of non edible vegetable oilrnbearing plants and the abundance of ethanol alcohol produced from the byproduct ofrnlocal sugar factories gave the country a great advantage in producing biodiesel and get arnlittle relief from petroleum related problems. However, the effort made to introduce therntechnology and take the most out of it is so low to force policy makers and encouragernlocal and foreign businessmen towards the production of biodiesel using local resources.rnTherefore this research tries to fill this gap.rnThe main purpose of this research is therefore to develop a biodiesel productionrntechnique from Jatropha oil (Jatropha curcas Linnaeus) and a locally produced ethanolrnalcohol. Special attention was paid to the optimization of base-catalyzedrntransesterification for converting fatty acid ethyl ester (FAEE). The crude Jatropha oilrnused in the transesterification contained 5.01 mg KOH/g of acid and after neutralizationrnit was possible to bring down the acid value to 1.35 mg KOH/g. Inorder to determinernthe optimum condition for tranestefication of Jatopha oil using ethanol and caustic sodarnas input, 16 experiments varyings ethanol-to-oil molar ratio (6:-9:1) and reactionrntemperature (55, 65, 70, and 78 oC). Reaction time, mixing intensity, and catalystrnconcentration was fixed to 3 hrs, 600 rpm, and 1.5 % by weight of the oil respectively.rnThe optimum conditions found for transesterification were an ethanol-to-oil molar ratiornof 9:1 and a reaction temperature of 70 0C. At the optimum condition obtained a FAEErnconversion of 80 % v/v was achieved. The resulting Jatropha biodiesel has, a density ofrn0.86 g/ml, viscosity of 4.13 mm2/s, acid value of 0.71 mg KOH/g, and flash point ofrn173 0C satisfing ASTM D6751-02 and EN 14214 biodiesel standards. The productionrnproces developed in this work will be used in production of a small scale plant withhrncapcity of 300 liter per day.