Microfluidic technology offers high interfacial area particularly in the multiphase reaction such as transesterification process to produce biodiesel. Methanol-to-oil molar ratio is one of the important parameters to enhance the biodiesel production. However, very few in literature are focusing on the hydrodynamic effect that is caused by the molar ratio accurately. In this study, stable and highly consistent droplet-slug flow inside a microchannel was generated using a T-junction to investigate the impact of hydrodynamic factor on the reaction. High molar ratio creates high interfacial area and number of droplets, hence resulting in the highest conversion of oil. This finding has revealed that it is possible to obtain 98 oil conversion at room temperature and relatively short reaction time of 80 s. It demonstrates that microchannel reactor has high potential for intensified process in the production of biodiesel. © 2019 Elsevier B.V.