A novel concept and efficient method for producing biodiesel (FAME) from grease (15-40 wt% free fatty acid, FFA) were developed by using tandem lipases for one-pot esterification of FFA and transesterification of triglyceride with methanol in a solvent-free system. Combining immobilized Candida antarctica lipase B (CALB) (Novozyme 435) favoring the esterification and immobilized Thermomyces lanuginosus lipase (TLL) (Lipozyme TLIM) preferring the transesterification at 2:8 (wt/wt) gave FAME in 80% yield, being better than that with Novozyme 435 or Lipozyme TLIM. Recombinant Escherichia coil (Calb/TII) co-expressing CALB and TLL was engineered as a more efficient tandem-lipases system. Using wet or dry cells (4 wt%) gave FAME in 87% or 95% yield, which is much better than that with E. coil cells expressing either CALB or TLL alone. Cells of E. coli (Calb/TII) were recycled for five times and retained 75% productivity, thus being practical for producing biodiesel from grease. (C) 2012 Elsevier Ltd. All rights reserved.