Since the oil crisis in 1973, tremendous numbers of studies have been conducted on various altemative Juels from solar, wind, water and biomass. Numerous studies are interested in using agricultural crops as source of renewable energy especially for transportation. While ethanol has been focussed for alternative fuel in gasoline engine, biodiesel has been focussed in diesel engine. Domestic demand for high and low speed diesel oils have increased rapidly within the past decade. The consumption of diesel oil was 9,928 million litres in 1990 and increased to 14,973 million litres in 2000. The consumption share of diesel oil is about 54 % of total energy consumption as petroleum products in transportation sector. Rudolf Diesel stated in 1912 that "The use of vegetable oil as fuel may be insignificant today. In the course of time, however, such products could become as important as today's petrolettm or petroleum-based products. " Vegetable oil is one of the renewable fuel for diesel engine. As the plant oils are mainly composed of 12-18 carbon atom in their fatty acids structure and can be substituted each other, this paper presented the use of indigenous vegetable oils, including coconut oil, as altemative fuel. It reviews R & D activities on the use of vegetable oils and bio-diesel as altemative fuel in Thailand. The status of today and future of bio-diesel as altemative fuel in Thailand are also described. In addition, its economic and environmental impact are discussed.