Using abounding bio-resources of West China to develop biodiesel meets the requirements of State Energy Policy and Sustainable Development Strategy. The article analyzed the importance and possibility to develop biodiesel in West China, and also discussed the available material resources of biodiesel production in detail. It is suggested that west area is suitable and potential to develop biodiesel. Based on an extensive discussion on the biodiesel production technologies, the paper discussed the characters of the biodiesel processes from different oil materials. It was suggested that production technologies must be developed to adopt the different material oil/fats in west area. In order to increase the competitive ability, up grade of by product and production of high value side products should be planed in the biodiesel production.