A study was undertaken to prepare biodiesel via two-step process using ionic liquid as first step catalyst due to the unsuitability of using the straight alkaline-catalyzed transesterification of high FFA presented in crude palm oil (CPO). In the first step, esterification of the FFA presented in the CPO was carried out using butylimidazolium hydrogen sulfate (BIMHSO4), in which the acid value was reduced from 6.93 to 1.02mg KOH/g and then, KOH-catalyzed transesterification was applied. The conversion rate of FFA attained 85.3 when 4.8 wt of BIMHSO4 was applied to the reaction system containing methanol to CPO ratio of 12: 1 reacted at 170 °C for 150min. The final yield in 97.3 revealed that the process proposed in this study could lead to an excellent biodiesel meeting the ASTM requirements. Furthermore, this new two-step catalysis process could solve the old conventional catalysis process drawbacks. © 2014 Korean Institute of Chemical Engineers, Seoul, Korea.