A solid base catalyst was prepared by neodymium oxide loaded with potassium hydroxide and investigated for transesterification of soybean oil with methanol to biodiesel. After loading KOH of 30 wt.% on neodymium oxide followed by calcination at 600 degrees C, the catalyst gave the highest basicity and the best catalytic activity for this reaction. The obtained catalyst was characterized by means of X-ray diffraction (XRD), Fourier transform infrared spectroscopy (FTIR), Scanning electron microscopy (SEM), Thermogravimetric analysis (TGA), N-2 adsorption-desorption measurements and the Hammett indicator method. The catalyst has longer lifetime and maintained sustained activity after being used for five times, and were noncorrosive and environmentally benign. The separate effects of the molar ratio of methanol to oil, reaction temperature, mass ratio of catalyst to oil and reaction time were investigated. The experimental results showed that a 14:1 M ratio of methanol to oil, addition of 6.0% catalyst, 60 degrees C reaction temperature and 1.5 h reaction time gave the best results and the biodiesel yield of 92.41% was achieved. The properties of obtained biodiesel are close to commercial diesel fuel and is rated as a realistic fuel as an alternative to diesel. (C) 2011 Elsevier Ltd. All rights reserved.