This paper explores the compatibility of biodiesel with different grades of polyethylene, specifically examining the extent of plasticization in order to gain a better understanding of the biofuel's compatibility with this common polymer. Its bulk influences on polyethylene were investigated by gravimetric and mechanical testing, and by the application of a newly developed nondestructive ultrasonic testing method. Diffusion rates and the extent of plasticization by biodiesel were compared to results obtained with toluene, a known plasticizer for polyethylene. Mechanical and gravimetric analysis showed that biodiesel exhibited bulk attributes of a plasticizer for the tested polyethylenes with reduced moduli proportional to the amount of fuel uptake and that uptake was inversely proportional to crystalline content of the polymer. Based on uptake amounts, the efficiency of biodiesel as a plasticizer towards polyethylene was found to be more than double that of toluene. However, spectral analysis by ultrasonics showed that absorbed toluene and biodiesel influenced the microstructure of polyethylene differently. Notable differences in internal stresses were noted between the two fluids for the same amount absorbed. A subsequent study analyzed the impact that biodiesel degradation had on plasticization. Although the trend showed a slight change in diffusion rate with increasing oxidation of the medium, the mechanical and ultrasonic results did not show significant differences between fresh and degraded biodiesel within the 45 days span of the test. Combining the evidence observed in this study, a mechanism is proposed for biodiesel plasticization that can help with failure prevention and material selection.