The fossil fuels are depleting rapidly and the prices are going up day by day. The vegetable oils converted into biodiesel have the potential of alternative fuels. There are several types of vegetable oils, edible & non-edible, which can be used for biodiesel production. Very little published work has been found on utilization of Madhuca Indica oil for biodiesel production including optimization of transesterification process. Very little research has been done on utilization of oil in general and optimization of transesterification process for biodiesel production using acid, base and heterogeneous (micro & nano) catalyst. In the present study, transesterification process with use of homogeneous and heterogeneous catalyst has been optimized. Various input parameters like oil-to-methanol molar ratio (1:05, 1:10 1:15 and 1:20), catalyst type (H2SO4, mCaO, nCaO and KOH), catalyst concentration (0.5, 2.5, 5.0 and 7.5 wt.%) and reaction temperature (60, 65 70 and 75°C) were studied by applying the taguchi designed orthogonal experimental array L16. Taguchi method was the statistical methods developed by Genichi Taguchi to improve the quality of any means (manufactured goods, engineering, biotechnology, marketing, advertising etc. ANOVA (F-test at P=0.05 contribution of each signal-to-noise factor) technique was used for optimization with the objective of maximizing (larger-the-better) the yield of high quality Madhuca indica oil biodiesel. The optimum conditions for transesterification process are: 1:10 oil-to-methanol molar ratio, 5.0 wt.% catalyst concentration, nano-CaO heterogeneous catalyst, & 65°C reaction temperature. The optimum yield of MIOB was 93.8%. The biodiesel produced (MIOB) is within the limits prescribed by EN-14214 standard. All these tests for the characterization of Madhuca indica biodiesel demonstrated that almost all properties are comparable to those of diesel, and this makes it a potential substitute for diesel fuel in compression ignition engines