During the production of biodiesel, crude glycerol is produced as a byproduct at 10% (w/w). Clostridium pasteurianum has the inherent potential to grow on glycerol and produce 1,3-propanediol and butanol as the major products. Growth and product yields on crude glycerol were reported to be slower and lower, respectively, in comparison to the results obtained from pure glycerol. In this study, we analyzed the effect of each impurity present in the biodiesel-derived crude glycerol on the growth and metabolism of glycerol by C. pasteurianum. The crude glycerol contains methanol, salts (in the form of potassium chloride or sulfate), and fatty acids that were not transesterified. Salt and methanol were found to have no negative effects on the growth and metabolism of the bacteria on glycerol. The fatty acid with a higher degree of unsaturation, linoleic acid, was found to have strong inhibitory effect on the utilization of glycerol by the bacteria. The fatty acid with lower or no degrees of unsaturation such as stearic and oleic acid were found to be less detrimental to substrate utilization. The removal of fatty acids from crude glycerol by acid precipitation resulted in a fermentation behavior that is comparable to the one on pure glycerol. These results show that the fatty acids in the crude glycerol have a negative effect by directly affecting the utilization of glycerol as the carbon source, and hence their removal from crude glycerol is an essential step towards the utilization of crude glycerol.