Despite the high energy demand in the industrialized world and the pollution problems caused by wide spread use of fossil fuels, the need for developing renewable energy sources with less environmental impact are increasing. Biodiesel is an attractive alternative fuel because of its nontoxicity and biodegradability which can be produced from vegetable oils and animal fats. The development of technologies for the separation and purification of biodiesel, is the limiting factor for the use of biodiesel as a fuel. For commercial application, the biodiesel product of alkali-catalyzed transesterification should be refined after glycerol separation by settling to fulfill the biodiesel standard specification. This crude biodiesel, after neutralization and methanol removal, should be further cleaned by either one of the following methods: wet washing, dry washing, membrane extraction or using ion liquids. This study represents a comparison on the wet washing as a traditional method and membrane separation of crude biodiesel. Experiments shows that membrane reactor is a better way for purification because of its less energy and no wastewater. Effect of various parameters in a membrane reactor such as methanol/oil molar ratio (4:1-7:1), catalyst concentration (0.25-1.5%) and reaction time (1-5h) were investigated. The best yield and quality of biodiesel were produced by means of membrane reactor at methanol/oil molar ratio, 6:1, catalyst concentration, 1%, and reaction time 5h.The best yield under optimal conditions was 97.56%.