Use of biodiesel in diesel engine is becoming popular due to its advantages such as eco friendly, green fuel, low cost and most importantly it is a renewable fuel. In the recent scenario of increased diesel fuel cost and environmental issues, the use of biodiesel in internal combustion engines in transport sector provides energy security along with environmental protection. The chemically treated vegetable oil called biodiesel can be produced from either edible or non edible oils through commonly known transesterification process. In this investigation, biodiesel produced from non edible jatropha oil has been used in a single cylinder water cooled stationary diesel engine to assess the performance and emission characteristics of the engine. The performance characteristics of biodiesel are similar to that of diesel fuel operation and emission levels are lower than the diesel fuel. The use of low cost biodiesel in diesel engines leads to same power output with lower emission levels which in turn leads to a global revolution in possessing a renewable fuel at stake and also assures energy security and environmental cleanliness.