Biodiesel, which is regarded as a promising alternative to a conventional petroleum-based diesel fuel, can be produced from transesterification of vegetable oils and alcohol in conventional batch and continuous reactors. Since the transesterification is an equilibrium-limited reaction, a large excess of reactants is usually used to increase the production of biodiesel, thereby requiring more expensive separation of unreacted raw materials. This study proposed the use of a reactive distillation for transesterification of soybean oil and methanol catalyzed by sodium hydroxide to produce biodiesel. The simulation results showed that a suitable configuration of the reactive distillation column consists of three reactive stages. The optimal conditions for the reactive distillation operation are at the molar feed ratio of methanol and oil at 4.5 : 1, reflux ratio of 3, and reboiler duty of 1.6×107 kJ h.1. Methanol and soybean oil should be fed into the column at the first stage. The effect of important operating and design parameters on the performance of reactive distillation was also presented.