The demand of energy is increasing around the world due to the high dependency of our society on energy. So the worldwide recognition of the limited supply of fuels has led to a large scale effort in search of alternative energy sources. Biodiesel has been considered as an alternative fuel to the petroleum diesel in compression ignition engines and is receiving more and more attention. Biodiesel can be obtained by the transesterification of methanol with triglycerides, with glycerin as by- product. This paper introduces the transesterification reaction of lard oil with methanol in the presence of hexane as solvent and potassium hydroxides as catalyst. Different from other researches, a new method to analyze the reaction process in this research was developed by starting with the by-product, crude glycerin. This new method was verified and the effects of various parameters such as solvent, molar ratio of methanol to oil (3:1-12:1), catalyst concentration (0.5-4 wt%) on the traneseterification process were investigated. Molar ratio of methanol to oil was optimized and identified to be 8:1, catalyst concentration of 2 wt% with hexane as solvent and at a temperature of 57℃ were found to be optimum for the reactions. Under this condition for 4 hours, the production yield can be 96.95%.