This paper reviews the impact of biodiesel called “fatty acid methyl ester” (hereinafter referred to as “FAME”), which was manufactured domestically using waste edible oil, on the performance and gas emissions of agricultural diesel engines. In terms of engine performance, one indicator showed output equivalent to diesel fuel. However, the resulting specific fuel consumption (hereinafter referred to as “SFC”) was high because the density of FAME, which exceeded that of diesel fuel, increased the mass flow rate of the fuel. Moreover, the nitrogen oxide (NO_X) emissions of FAME were comparable to those of diesel oil. However, emissions of particulate matter (hereinafter referred to as “PM”) discharged by FAME were smaller than from diesel fuel. Under a driving condition tending to generate a large amount of black smoke due to high engine load, PM emissions were halved compared to those of diesel fuel. This phenomenon is presumed attributable to the reduction in soot production achieved using FAME, which contains a relatively high amount of oxygen.