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The diesel engine is the most efficient power plant among all known types of internal combustion engines. Heavy trucks, urban buses, and industrial equipment are powered almost exclusively by diesel engines all over the world and diesel powered passenger cars are increasingly popular. Increase in petroleum prices, threat of global warming has generated an interest in developing alternative fuels for engine. Technologies now focusing on development of plant based fuels, plant oils, plant fats as an alternative fuel. This article is a literature review of investigation of the potential to use karanja oil in a four stroke, DI diesel engine under different load conditions. Karanja based bio-diesel is a non-edible, biodegradable fuel suitable for diesel engines. Karanja biodiesel has been prepared by transesterification method. Biodiesel-diesel blends have been prepared on volume basis. Physical properties of Karanja biodiesel, diesel and its blends have been determined.