Biodiesel is renewable and environmentally friendly; however, there are still many challenges for its commercial production as an alternative of petroleum-based transportation fuels, particularly in China with very limited resources for its biofuels development. In this article, the update progress of biodiesel R & D and production is reviewed, with a focus on its feedstock supply, manufacturing processes, quality control and byproduct utilization. It is concluded that the strategy of biorefinery to ultimately explore feedstock potentials will make biodiesel production more economically competitive.