Biodiesel was generated through whole cell catalyzed transesterification of acid oil, to the extent of up to 92%. The fuel properties of biodiesel (B100) and its blend (B20) were determined and compared with standard biodiesel as per American Society for Testing and Materials (ASTM) standard (ASTM D6751). B100 and B20 showed good pour point of -26 degrees C and -29 degrees C, respectively, indicating their operation viability in colder environment. Other properties of biodiesel are quite similar to petroleum diesel and ASTM standard. The results of this study reveal the potential use of acid oil as feedstock for generation of fuel grade biodiesel through biocatalyzed transesterification.