Biodiesel has attractive fuel properties such as excellent biodegradability and lubricity, almost no emissions of sulfur oxides, PAH and n-PAH, reduced CO2, PM and CO emission, superior combustion efficiency, etc. However, burning of biodiesel generally produces higher levels of NO, emissions, primarily due to its high oxygen content. In this study, the emulsification technology has been considered to reduce the NO, emission level of fossil fuel. Biodiesel, produced by means of transesterification reaction accompanied with a peroxidation process, was emulsified to form two-phase W/O and three-phase O/W/O emulsions. The effects of the emulsification variables such as hydrophilic lipophilic balance (HLB), and water content on the fuel properties and emulsion characteristics of W/O and O/ W/O emulsions were investigated in this study. The experimental results show that the surfactant mixture with HLB = 13 produced the highest emulsification stability while HLB = 6 produced the lowest emulsification stability and the most significant extent of water-oil separation among the various HLB values for O/W/O biodiesel emulsion. The kinematic viscosity, specific gravity and carbon residual of the biodiesel emulsions were larger than those of the neat biodiesel. In addition, the W/O biodiesel emulsion was found to have a smaller mean droplet size, lower volumetric fraction of the dispersed phase than the O/W/O biodiesel emulsion, and the highest heating value among the test fuels, if the water content is deducted from the calculation of the heating value. (c) 2006 Elsevier Ltd. All rights reserved.