Biodiesel from clean oils is comparatively easier than production from crude and non-edible oils. To achieve maximum yield of biodiesel, a two stage process is adopted in which non-edible oils are used as feed-stock: an acid catalyzed esterification of free fatty acids followed by base catalyzed transesterification. Presence of water formed during esterification reaction is detrimental to a viable transesterification process. In the present work, an alternate method for removal of water by in situ hydrolysis reaction of methyl acetate is introduced. The dehydration using methyl acetate during esterification has yielded good results as the soap formed during transesterification was minimal. The results indicated high conversion of triglycerides to methyl ester for lower oil to methanol ratio and at a lower temperature. For 1:3 molar ratio of oil to methanol, the conversion obtained was less than 90 percent and is equivalent to conversions with higher alcohol ratios during esterification in the absence of methyl acetate. These results are indicative of the fact that use of methyl acetate reduces the alcohol to oil ratio without affecting the conversions. Moreover, higher conversions are possible at lower temperatures in the presence of methyl acetate. It is further observed that the oils that are subjected to free fatty acid conversions in the presence of methyl acetate record very little soap formation during the transesterification reactions, thereby resulting in higher grade of biodiesel.