The production of energy from renewable and waste materials is an attractive alternative to the conventional agricultural feed stocks such as corn and soybean. This paper describes an approach to extract oil from spent coffee grounds and to further transesterify the processed oil to convert it into biodiesel. This process yields 10-15% oil depending on the coffee species (Arabica or Robusta). The biodiesel derived from the coffee grounds (100% conversion of oil to biodiesel) was found to be stable for more than 1 month under ambient conditions. It is projected that 340 million gallons of biodiesel can be produced from the waste coffee grounds around the world. The coffee grounds after oil extraction are ideal materials for garden fertilizer, feedstock for ethanol, and as fuel pellets.