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Increased environmental awareness and depletion of resources are driving industry to develop alternative fuels that are environmentally more acceptable. Fatty acids esters (biodiesel) are known to be good alternative fuels. Due to economic reasons, the use of cheap raw materials for biodiesel production is preferred. In this case, ricebran oil, non-edible grade is used. Base catalyzed transesterification of ricebran oil is investigated and process parameters for ricebran biodiesel production are optimized. Various properties like viscosity, density, flash point, calorific value of biodiesel thus prepared are characterized as per ASTM D6751 and found comparable to mineral diesel. Steady state engine dynamometer test at 1800 rpm has been carried out to evaluate the performance and emission characteristics of a medium duty transportation DI diesel engine. Emission tests with all the fuel blends have also been carried out using European 13 MODE test (ECE R49).