In the present work, bio diesel was produced from Mahua (Madhuca Indica) oil through esterification followed by transesterification . Kinetic studies to optimize the preparation of Mahua Oil Methyl Ester (MOME) were carried out varying different parameters like methanol / oil molar ratio, % of excess alcohol, reaction time, temperature and concentration of acid catalyst. The results show that 4% H2SO4, 0.33% v/v alcohol/oil ratio, 1 hr reaction time and 650C temperature are the optimum conditions for esterification. Optimum conditions for the production of biodiesel from Mahua oil are 8% Sodium Methoxide , 0.33%v/v alcohol/oil ratio, 1 hr reaction time , 65 0C temperature and 150% v/v excess alcohol . The various fuel properties of MOME were compared with ASTM and DIN standards. The fuel properties were found to be comparable with that of diesel fuel. Mahua tree is found in abundance in most parts of India and from its chemical composition it is found that the oil is almost similar to that of other nonedible oils. It is concluded that the Mahua oil is also a potential raw material for biodiesel. The Biodiesel (MOME) produced from mahua oil is cost effective and can be a viable alternative fuel in near future.