In the view of limited fossil fuel reserves which is continuously depleting and other environmental issues, the efforts are made to find a potential alternate self -sustainable, biodegradable and environment friendly fuels. This has promoted bio diesel significantly in past decade due to its similar characteristics. Although there are various problems like carbon deposition, wearing of engine, severe corrosion associated with bio-diesel usage in engine compatibility. The present study was intended to produce bio-diesel optimally from mixture of waste vegetable oil via Transesterification reaction. Further we have prepared and analyzed the performance characteristic of various bio-diesel blends in the 4 stroke diesel engine. The optimum conditions to achieve maximum performance of biodiesel blends were investigated with different load conditions. The fuel properties of blends including density, kinematic viscosity and calorific value lie within the standards. We have found satisfactory results without engine modifications for B60. Bio-diesel will play a significant role in advancement of internal combustion engines which are facing various problems due to increase in pollution and rapid depletion of fossil fuels. Also, it will make major contribution in the coming years and will lower the pollution because of its eco-friendly nature.