The production of biodiesel from fatty acid distillates (FAD) is a technically viable route but the assessment of engine performance and environmental impact are non-well researched issues. The scope of this contribution is to develop a characterization of the FAD obtained as a waste product from the vegetable oil refining industry and to evaluate the biodiesel performance and exhaust emissions on a diesel engine. A physicochemical characterization is also developed. The gas chromatography results show the fatty acids profile, indicating 50.56% of linoleic acid. Acidity level indicated that the FAD must be converted to biodiesel before its use on a diesel engine. The conversion of FAD to biodiesel reaches 92% yield. Combustion of biodiesel from FAD shows 80% increase in the specific fuel consumption and 5.6% in NOx, shorter ignition delay and hydrocarbons and CO reductions in 22% and 46%, respectively. The results demonstrate the viability to produce biofuels from FAD, which also leads to a reduction of environmental pollutants.