The world is currently dependant on fossil fuels as a fuel source for transportation and fuelling the industrial sector. The increasing awareness of the depletion of fossil fuel resources and the environmental benefits of bio-diesel has made it more attractive in recent times. Many researches are being made to commercialize the production. However the cost of bio-diesel is the major obstacle to its commercialization in comparison to conventional diesel fuels. The objective of this paper is to produce biodiesel from Used cooking oil using a two stage process of acid and base catalyzed Transesterification reaction and optimizing the process variable such as Methanol to oil ratio, Catalyst to oil ratio, Reaction temperature and Reaction time as these process variable has adverse effect on the Transesterification reaction. The optimized parameters gave an yield of about 96%. Also an attempt had been made to examine the effect of temperature, moisture and storage time on the accumulation of free fatty acids in Used cooking oil. The results showed that the triacylglycerides was hydrolysed and the free fatty acid content was raised.