In India, due to various mythological and religious reasons hundreds of devotees pour oil over the idols in Hanuman or Maruti and Shani temples. The oil once poured cannot be reutilized and was ultimately wasted. These waste temple oil from Shani Shingnapurwas used to produce biodiesel. Immobilized Pseudomonas aeruginosa was used to catalyze transesterification of waste temple oil. The cells of P.aeruginosa were immobilized within the sodium alginate. Biodiesel production and its applications were gaining popularity in recent years due to decreased petroleum based reserves. Biodiesel cost formed from waste temple oil was higher than that of fossil fuel, because of high raw material cost.To decrease the cost of biofuel, waste temple oil was used as alternative as feedstock. It has lower emission of pollutants; it is biodegradable and enhances engine lubricity. Waste temple oil contains triglycerides that were used for biodiesel production by chemical and biological method.Transesterification reaction of oil produces methyl esters that are substitutes for fatty acid alkyl biodiesel fuel. Characteristics of oil were studied such as specific gravity, viscosity, acid number, saponification number.Parameters such as temperature,oil: methanol ratio were studied and 88%, 96% of biodiesel yield was obtained with effect of temperature and oil: methanol ratio on transesterification reaction. Withaddition ofNaOH or KOH to fatty acids which formed salt known as soap,which is excellent emulsifying and cleaning agents.