In order to raise the conversion rate and purity of biodiesel, the technology for production of biodiesel by using rapeseed oil was studied through the transesterification reaction of fatty acid and methanol with catalyst of KOH. The technological parameters including the amount of methanol, the amount of catalyst, temperature and reaction time were investigated. The experimental results show that the optimum conditions for the transesterification reaction are 20% methanol and 1.2% catalyst(KOH) of rapeseed oil material, 90～120 min of reaction time and 65℃ of temperature. The quality criteria of the biodiesel produced from rapeseed oil meet the same standards to ASTM of US and DINE of Germany, and the conversion rate of rapeseed oil to biodiesel reaches 94.89%. If about 10 million hectares of wasteland and marginal land in South China in winter are exploited to plant rape, and the rapeseed oil is processed according the above-mentioned optimum conditions for producing biodiesel, the yield of biodiesel is going to be 7.4 million tons with a broad development prospect.