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Biodiesel was prepared through transesterification of castor oil and ethanol. The optimization of parameters related to the yield of transesterification, such as oil to ethanol molar ratio, concentration of catalyst, reaction temperature and reaction time, was investigated. The results indicated that the optimum condition for castor oil ethyl ester (COEE) production was 1:12 oil to ethanol molar ratio, 1.5% catalyst concentration, 40 °C reaction temperature and 150 minutes reaction time. To avoid extremely high viscosity of castor oil which can affect the fuel injection system, COEE was blended with commercial diesel fuel at different concentrations ranged from 5%-15% volume and key properties of fuel blends, mainly focused on fuel lubricity and viscosity were evaluated.