In this research, biodiesel was initially produced from waste vegetable oil by transesterification reaction. The main properties of this fuel were compared with the ASTM D-6751 standard.then, performance of MF-399 tractor engine was tested and evaluated by using 5 to 25 percent biodiesel and diesel blends. Test results showed that, the power and torque of MF-399 tractor engine were increased, using biodiesel and diesel blends. This is because of good combustion of biodiesel due to high oxygen content of this fuel. There was also a slight increase in the fuel consumption and specific fuel consumption of biodiesel and diesel blends due to low calorific value of biodiesel. Results show that the B5D95 blend has the best performance and the lowest increase in specific fuel consumption among the other blends. The fuel consumption and specific fuel consumption of B25D75 was lower than the B20D80 blend. Therefore, if the goal is using high amount of biodiesel, B25D75 blend is recommended for use in MF-399 tractor engine.