Biodiesel is an alternative fuel for diesel which is made through a chemical process which converts vegetable oils and fats of natural origin into fatty acid methyl esters (FAME). The most usual method to transform Bio-oil into biodiesel is Transesterification that can be carried out using different catalyst systems. Jatropha is second generation, non-edible oil and can be used for producing biodiesel.The Transesterification reaction consists of heating jatropha oil with proper concentration of methanol at appropriate temperature in the presence of catalyst. After reaction, the mixture is allowed to settle down for 8-10 hrs. Two separate layers, top layer of biodiesel and lower layer of glycerol will form, which can be separated.Reaction temperature, amount of methanol, catalyst and reaction time are important parameters which decide yield and quality of biodiesel. Apart from these, the free fatty acids (FFA) content of jatropha oil plays important role in deciding yield of biodiesel. Jatropha oil with less than 2% FFA is most preferred for transesterification, generally known as one-step process Whereas Jatropha oil with FFA value more than 2% is needed to be neutralised before performing trans-esterification, which is known as two-step process.Various set of experiments are conducted in order to optimize these parameters and it is concluded that reaction is best with 6:1 molar ratio of methanol in the presence of 1% (wt of oil) KOH catalyst for 90 minutes reaction time at 60OC temperature for optimized results. Further post processing steps like separation, washing and heating is done to get final Biodiesel. This study compares one-step and two-step processes of producing biodiesel in which one-step process results 34% increment in Biodiesel yield than two-step process. One-step process has 96% biodiesel yield efficiency. This increment in efficiency is due to proper heat treatment and also better seeds quality.