The biological treatment of wastewater discharged from a biodiesel fuel (BDF) production plant conducting alkali catalysis transesterification was investigated. BDF wastewater has a high pH and high hexane-extracted oil and low nitrogen concentrations, and inhibits the growth of microorganisms. The biological treatment of BDF wastewater is difficult because the composition of such wastewater is not suitable for microbial growth. To apply the microbiological treatment of BDF wastewater using an oil degradable yeast, Rhodotorula mucilaginosa, the pH was adjusted to 6.8 and several nutrients such as a nitrogen source (ammonium sulfate, ammonium chloride or urea), yeast extract, KH2PO4 and MgSO4 center dot 7H(2)O were added to the wastewater. The optimal initial concentration of yeast extract was 1 g/l and the optimal C/N ratio was between 17 and 68 when using urea as a nitrogen source. A growth inhibitor was also present in the BDF wastewater, and this growth inhibitor could be detected by measuring the solid content in an aqueous phase after the hexane extraction of the wastewater. Microorganisms could not grow at solid contents higher than 2.14 g/l in the wastewater. To avoid the growth inhibition, the BDF wastewater was diluted with the same volume of water. Oil degradation in the diluted BDF wastewater was observed and the best result was obtained under the determined optimal conditions. This treatment system is simple because no controllers, except for a temperature, are necessary. These results suggest that the biological treatment system developed for BDF wastewater is useful for small-scale BDF production plants.