Biodiesel is a renewable energy source produced from natural oils and fats, and is being used as a substitute for petroleum diesel. The aim of this study was to investigate the potential of using spent coffee grounds for biodiesel production and its by-products to produce pelletized fuel, which is expected to help the biodiesel production process achieve zero waste. For this experiment, spent coffee grounds sample was collected from Kaldis coffee, Addis Ababa, Ethiopia. Extraction of the spent coffee grounds oil was then conducted using n-hexane, ether and mixture of isopropanol to hexane ratio (50:50 %vol), and resulted in oil yield of 15.6, 17.5 and 21.5 %w/w respectively. A two-step process was used in biodiesel production with conversion of about 82 %w/w. The biodiesel quality parameters were evaluated using the American Standard for Testing Material (ASTM D 6751). The major fatty acid compositions found by Gas chromatography were linoleic acid (37.6%), palmitic acid (39.8%), oleic (11.7%), and stearic acid (8.6%). In addition, solid waste remaining after oil extraction and glycerin ratio (glycerin content from 20-40%) was evaluated for fuel pellet (19.3-21.6 MJ/Kg) applications. Therefore, the results of this work could offer a new perspective to the production of biofuel from waste materials without growing plants and/or converting food to fuel.