For the current research work, New Zealand origin sheep skin fat (NOSSF) with 7% free fatty acid (FFA) content was chosen for biodiesel production. The response surface methodology (RSM) was used to optimize the acid catalyzed esterification of NOSSF. Analysis of variance (ANOVA) showed methanol to NOSSF mole ratio as an important parameter for the acid esterification reaction. The p-value < 0.05 and F-value = 401.18 showed that quadratic model is significant. NOSSB yield of about 92% was achieved, when the acid esterification was carried out with 0.5 wt% H2SO4, 18:1 methanol: NOSSF mole ratio at 65 degrees C for 4 h followed by alkali-catalyzed transesterification of NOSSE with 0.5 wt% NaOH, 6:1 methanol: NOSSE mole ratio at 65 degrees C for 2 h. The physicochemical properties of NOSSB-PBD blends were evaluated and were observed to be well within the limits of ASTM D765 standards. Among all the blends, the NOSSB20 blend, showed good performance in par with PBD fuel operation with respect to BTE, BP and BSFC at full load. NOSSB-PBD blends emitted less CO and HC but more CO2 and NOx emissions than PBD. (C) 2019 Elsevier Ltd. All rights reserved.