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Environment friendly alternative energy sources need to be developed in order to meet the burgeoning demand for fossil fuels for transportation. Utilization of vegetable oils as biodiesel is most accepted route. Yield and quality of biodiesel is dependent on feedstock quality specially moisture and free fatty acid (FFA) content. In this study, biodiesel was produced from high free fatty acid neem oil using a two step process i.e. esterification followed by transesterification. This biodiesel was characterized for its physical, chemical and thermal properties. Performance, emission and combustion characteristics of this biodiesel and its various blends with mineral diesel were compared with baseline data in a direct injection (DI) diesel engine. Brake specific fuel consumption for biodiesel and its blends was higher than mineral diesel and brake thermal efficiency of all biodiesel blends was found to be higher than mineral …