In this investigation, Enteromorpha compressa algal oil with high free fatty acids (FFA) used as a feedstock for biodiesel production. Two step process was developed and kinetic study executed to obtain reaction rate constant for the transesterification reaction. The acid esterification was carried out to reduce FFA from 6.3% to 0.34% with optimized parameters of 1.5% H(2)SO(4), 12:1 methanol-oil ratio, 400 rpm at 60 °C and 90 min of reaction time. The maximum biodiesel yield 90.6% was achieved from base transesterification through optimum conditions of 1% NaOH, 9:1 methanol-oil ratio, 600 rpm and 60 °C temperature for 70 min. The algal biodiesel was characterized by GC-MS, HPLC and NIR. This transesterification follows first order reaction kinetics and the activation energy was determined as 73,154.89 J/mol. The biodiesel properties were analyzed and found to be within the limits of American standards. Hence, E. compressa serves as a valuable renewable raw-material for biodiesel production. Copyright © 2012 Elsevier Ltd. All rights reserved.