A new method of producing fuel from biological oils and fats is provided, which comprises the following steps: (a) proceeding with a catalytic cracking-deoxygenation reaction for the biological oils and fats under heating in the presence of a cracking-deoxygenation catalyst; (b) mixing the product of step (a) with hydrogen gas; and (c) proceeding with a catalytic hydrodeoxygenation reaction for the mixture from step (b) under heating in the presence of a hydrodeoxygenation catalyst. By means of the method of the present invention, clean fuel produced by using biological oils and fats as raw materials is compatible with the fuel composition produced from crude oil refining.