The successful alternative fuel is one which should fulfil environmental and energy security needs without sacrificing its operating performance. Every nation has locked their eyes on biodiesel as main replacement of crude oil specially diesel. Bio-diesel is fatty acid of ethyl or methyl ester made from unused or used vegetable oils and animal fats. Bio-diesel is eco-friendly, alternative diesel fuel prepared from domestic renewable resources such as vegetable oils and animal fats exclusively for diesel engines. Experimental investigation was carried out on used mustard oil to study its properties and to check its suitability as a biodiesel and also a replacement for diesel oil in future. The biodiesel from used mustard oil was prepared by the process of Transesterification. In Transesterification process the mixture of Mustard oil and alcohols was constantly mixed, in the presence of base catalyst potassium hydroxide (KOH) at 600C with the help of water bath shaker. The concentration of catalyst which affects the yield of product was studied during Transesterification process to optimize its effects. The other parameter which also effect the yield of process were the time of reaction, concentration of alcohol (%) were also optimized during Trans esterification process. In this work, three process variables used for standardization of transesterification process, various fuel properties of biodiesel produced from waste cooking oil are determined and the different blends of waste cooking oil and diesel are tested on multi-cylinder automotive diesel engine to evaluate its performance characteristics. Hence the problem formulated can be named as “Study of performance characteristics of compression ignition automotive engine powered by various blends of bio-diesel extracted from waste cooking oil”.