A sequential synthesis of hydrogen, iron nanoparticles and biodiesel was developed through a single step reaction. Hydrogen was generated as 2600 +/- 25 mL during the methanolysis of sodium borohydride. Iron nanoparticles in the form of maghemite (gamma-Fe2O3, maghemite nanoparticles, MNPs) were formed by the chemical reduction of ferric chloride with sodium borohydride. The obtained maghemite nanoparticles were characterized by Fourier transform infrared spectroscopy (FTIR), X-ray diffraction (XRD), X-ray photoelectron spectroscopy (XPS) and transmission electron microscopy (TEM) analysis. The size of the maghemite nanoparticles ranged from 15 to 27 nm. Biodiesel was produced by transesterification reaction of Pongamia pinnata oil using in situ formed maghemite nanocatalyst with the highest yield of 90 +/- 1%. The formed biodiesel was analyzed by FTIR and gas chromatography-mass spectrometry (GC-MS). The saturated, monounsaturated and polyunsaturated fatty acid methyl esters distributions of biodiesel were measured using GC-MS and the values were reported as 27,37, 56.41 and 16.22%, respectively. The fuel properties of the resultant biodiesel agreed well with the ASTM D6751 specifications. These findings show that the produced biodiesel and hydrogen were commercially attractive and potentially alternative for petrodiesel.