Disclosed is an improved process for the production of fatty acid lower alkyl esters according to formula (I) R1CO—OR2   (I) in which R1CO represents a linear or branched acyl moiety having from about 6 to about_22 carbon atoms and 0 to 6 double bonds and wherein R2 is a linear or branched alkyl moiety having 1 to 6 carbon atoms, by transesterification of triglycerides or fatty acid esters using C1-C6 aliphatic alcohols, which includes the steps of (a) providing an aqueous mixture of aliphatic C1-C6 alcohol by fermenting in a first reactor a carbon_source comprising carbohydrates and/or glycerol produce a fermentation broth comprising said aliphatic C1-C6 alcohol, (b) providing in a second reactor a triglyceride and/or an ester of a fatty acid, together with a biocatalyst capable of effecting a transesterification reaction, (c) transferring said aqueous aliphatic C1-C6 alcohol mixture obtained from said first reactor into said_second reactor to provide_a two-phase system, and (d) effecting the transesterification reaction to produce said fatty acid lower alkyl ester and a glycerol- or alcohol-containing aqueous phase. The products thus obtained are particularly useful as components of the fuel known as biodiesel.