Lewis acids (AlCl(3) or ZnCl(2)) were used to catalyze the transesterification of canola oil with methanol in the presence of terahydrofuran (THF) as co-solvent. The conversion of canola oil into fatty acid methyl esters was monitored by (1)H NMR. NMR analysis demonstrated that AlCl(3) catalyzes both the esterification of long chain fatty acid and the transesterification of vegetable oil with methanol suggesting that the catalyst is suitable for the preparation of biodiesel from vegetable oil containing high amounts of free fatty acids. Optimization by statistical analysis showed that the conversion of triglycerides into fatty acid methyl esters using AlCl(3) as catalyst was affected by reaction time, methanol to oil molar ratio, temperature and the presence of THF as co-solvent. The optimum conditions with AlCl(3) that achieved 98% conversion were 24:1 molar ratio at 110 degrees C and 18 h reaction time with THF as co-solvent. The presence of THF minimized the mass transfer problem normally encountered in heterogeneous systems. ZnCl(2) Was far less effective as a catalyst compared to AlCl(3), which was attributed to its lesser acidity. Nevertheless, statistical analysis showed that the conversion with the use of ZnCl(2) differs only with reaction time but not with molar ratio. (C) 2008 Elsevier Ltd. All rights reserved.