During diesel engine operation, some fuel is entrained in engine oil, particularly as a consequence of strategies to regenerate NOx traps or particle filters. This “fuel dilution” of oil can adversely affect engine oil properties and performance. Compared to diesel fuel, biodiesel is more prone to fuel dilution and more susceptible to oxidation. Oxidation stability experiments were conducted at 160°C using a modified Rapid Small-Scale Oxidation Test (RSSOT) and a Rancimat instrument with 0, 5, 10, and 20 wt% biodiesel in four fully formulated engine oils, two partially formulated engine oils, and two base oils. These experiments showed decreasing oxidation stability with increasing biodiesel content. An exception was noted with the least stable oils (two base oils and one engine oil) in which 5 wt% biodiesel improved the oxidation stability relative to oil without biodiesel. Experiments with biodiesel distillation fractions identified this stability enhancement within the least volatile biodiesel fraction, consistent with natural antioxidants in the biodiesel. Omission of two engine oil additives, antioxidants and zinc dialkyldithiophosphates (ZDDP), led to an unexpected increase in oxidation stability (with and without biodiesel). Time-series oxidation experiments at 160°C with one of the fully formulated engine oils, with and without 20 wt% biodiesel, demonstrated that the biodiesel caused greater oxidation instability and extent of oxidation, greater formation of peroxides and reduction in total base number (TBN), increased ester content, and higher density. Kinematic viscosity increased with aging time and eventually surpassed that of the engine oil aged without biodiesel. With extended aging time, the fully formulated engine oil containing biodiesel “broke,” forming black tar-like materials with high viscosity.