NOVELTY - Preparing biodiesel involves mixing bentonite with water in a certain molar ratio to obtain an activated bentonite suspension. The obtained activated bentonite suspension is dried and then pulverized to obtain a powdered material, which is then sieved through 200-300 mesh size sieves to obtain fine powdered material. Calcium oxide (9-12%) is mixed with fine powdered material to obtain an emulsion, which is heated at 70-80 degrees C to obtain an alkaline suspension of bentonite.    USE - Method for preparing biodiesel by transesterification reaction (claimed).    ADVANTAGE - The method enables to prepare high quality biodiesel that has wide industrial applicability by transformation of wastes into valuable product in a simple and environment-friendly manner.    DETAILED DESCRIPTION - Preparing biodiesel involves mixing bentonite with water in a certain molar ratio to obtain an activated bentonite suspension. The obtained activated bentonite suspension is dried and then pulverized to obtain a powdered material, which is then sieved through 200-300 mesh size sieves to obtain fine powdered material. Calcium oxide (9-12%) is mixed with fine powdered material to obtain an emulsion, which is heated at 70-80 degrees C to obtain an alkaline suspension of bentonite. The obtained alkaline suspension of bentonite is heated in a water bath at 45 degrees C, and then mixed with sodium hydroxide solution (15-20%) and deionized water. The obtained suspension is stirred uniformly followed by filtration, where the collected solid residue is dried and then set for pulverization to obtain ground material as catalyst. Waste oil, methanol and obtained ground material as catalyst is added in a reactor in a molar ratio of 1:1-3:3.5, and then allowed to react at 60-70 degrees C. After completion of the reaction the obtained solution is warmed at 80-85 degrees C to recover the residual amount of methanol and catalyst. The leftover product in the solution as biodiesel is heated at certain temperature to obtain a dehydrated product as desired one.