KOH-catalyzed synthesis of biodiesel was carried out in capillary microreactors with inner diameters of 0.25 or 0.53 mm, with unrefined rapeseed oil and cottonseed oil as raw materials. The influences of the methanol to oil molar ratio, the residence time, the catalyst concentration, the reaction temperature, and the dimension of the capillary on the production of biodiesel were examined. The results indicated that the residence time was greatly reduced by using microchannel reactors, compared with a conventional batch reactor. The reaction temperature was the minimal factor in the yield of methyl ester. Meanwhile, the methyl ester yield first increased with the methanol/oil ratio and then decreased due to emulsion and saponification. The inner diameter of the microchannel reactor had a strong influence on the transesterification reaction. Higher methyl ester yield could be obtained at shorter residence times for the microchannel reactor with the smaller inner diameter.