Methanol was replaced by dimethyl carbonate for biodiesel production. In the process, fatty acid methyl ester (FAME) was produced through transesterification of soybean oil with dimethyl carbonate (DMC) using potassium methoxide as a catalyst. This method produced a more attractive by-product, glycerol carbonate (GC). Factors affecting the reaction such as vegetable oil to DMC molar ratio, catalyst concentration, reaction time and reaction temperature were optimized. Triglyceride conversion of 95.8% was obtained at the optimized condition. This process provided an insight into the reactivity of DMC at different temperature. Co-production of FAME and glycerol carbonate (GC) proceeded through carboxymethylation reaction because methoxyl group and carbonyl group are generated which subsequently attacked the carbonyl moiety in glyceride molecules to form the required products. (C) 2014 Elsevier Ltd. All rights reserved.