The quality of fatty acid methyl esters of linseed oil; a highly unsaturated oil, as a biodiesel fuel, was compared to that prepared using palm oil; a highly saturated vegetable oil. The comparison included the fuel properties such as the calorific value, flash point, carbon residue%, ash%, pour point, cetane index, viscosity, ASTM distillation characteristics and oxidative stability. The performance of a diesel engine running using 50% blend of each with regular diesel has been also assessed at different engine loadings and compared to that using regular diesel fuel. The parameters considered in this assessment were the brake specific fuel consumption, the brake thermal efficiency, and the composition of the combustion exhaust The results have shown that biodiesel produced by trans-esterification of linseed oil have two advantages over that produced by trans-esterification of palm oil being more volatile with higher heating value. However, the flash point of linseed biodiesel was lower than that of palm oil biodiesel which makes it less safe during handling and storage. Moreover, linseed biodiesel was much less stable to oxidation than palm oil biodiesel whereby the induction period measured by Rancimat test was 40.6 hours in case of palm biodiesel compared to 2.8 hours in case of linseed. The effect of biodiesel unsaturation on diesel engine performance in terms of fuel consumption rate and brake thermal efficiency was insignificant.