Abstract: Esterification of oleic acid in supercritical methanol was investigated; the effects of operation parameters such as reaction temperature, reaction time and molar ratio of methanol to oleic acid on the conversion of oleic acid were examined. The results illustrated that the esterification of oleic acid in supercritical methanol can be realized under much milder conditions (i.e. lower temperature, shorter reaction time as well as lower molar ratio of methanol to oleic acid) than the transesterification of grease in supercritical methanol. These suggested that triglycerides first hydrolyze to fatty acids and then the fatty acids undergo methyl esterification to form methyl esters in supercritical methanol. Therefore, it is feasible to use the feedstock containing higher water and free fatty acid, such as waste cooking oil and deodorizer distillate, to produce biodiesel in low cost with supercritical methanol.