Transesterification of soybean oil in supercritical methanol has been carried out in the absence of catalyst. A co-solvent was added to the reaction mixture in order to decrease the operating temperature, pressure and molar ratio of alcohol to vegetable oil. With propane as cosolvent in the reaction system, there was a significant decrease in the severity of the conditions required for supercritical reaction. which makes the production of biodiesel using supercritical methanol viable as an industrial process. A high yield of methyl esters (biodiesel) was observed and the production process is environmentally friendly. Furthermore the co-solvent can be reused after suitable pretreatment. (C) 2004 Elsevier Ltd. All rights reserved.