Present study deals with the optimization of biodiesel production using rapeseed oil as feedstock and $NaOCH_3$ as a catalyst. Optimization of different reaction parameters, such as catalyst concentration, reaction temperature, reaction time. and alcohol to oil molar ratio, was done using response surface methodology (RSM). The optimal experimental conditions for biodiesel production were as follows: catalyst concentration (%) 0.30, reaction temperature $55^{circ}C$, molar ratio 6.75, and reaction time 60 min. Under these optimal conditions, 97.5 percentage yield of biodiesel was obtained. The observed and predicted values of rapeseed oil methyl esters (ROMEs) yield showed a linear relationship. The fuel properties such as specific gravity $0.876{pm}0.01$, flash point $168{pm}0.48^{circ}C$, fire point $197.8{pm}0.31^{circ}C$, pour point $-7{pm}0.060^{circ}C$, cloud point $-2{pm}0.10^{circ}C$ kinematic viscosity $4.42{pm}0.26;mm^2/sec$, and sulfur content 0.002 mg/Kg of the produced biodiesel show the suitability of rapeseed oil biodiesel, as fuel. Moreover, engine performance test of the Rapeseed oil biodiesel (rapeseed oil methyl esters, ROME) was examined. The results showed that CO and particulate matter (PM) emissions of the ROME were lower than those of diesel fuel. $NO_X$ emissions of the ROME were lower for B5, B20, B40, and B50, while higher for B80 and B100. These results show the environment benefits of biodiesel.