The potential of using dairy waste scum as a feed stock for bio-diesel production was investigated. Present study optimized the parameters involved in transesterification process of Dairy Waste Scum Oil. Gas chromatography was used to determine the fatty acid composition of Dairy Waste Scum Oil. Results revealed that the low free fatty acid content was a notorious parameter to determine the viability of alkaline transesterification. The yield of bio-diesel reached 96.7% when 1.2 wt.% of Potassium Hydroxide, reaction temperature of 75°C, 30min of time and 6:1 Methanol oil ratio at 350rpm. Thermo gravimetric analysis followed the evaluation of transesterification process. The present analysis confirms that bio-diesel from dairy waste scum is quit suitable as an alternative to petroleum diesel with recommended fuel properties as per ASTM standards. This new way for using dairy waste scum reduces the cost of production of bio-diesel and the problem related to the disposal of Dairy scum.