Pure αFe 2 O 3 and αFe 2 O 3 1-x /ZnO x (x = 0, 40 and 80 wt%) nanoparticles were synthesized using the sol-gel method and, then, tested for biodiesel production from canola oil with the sonochemical process. Characterization of nanocatalysts was carried out using XRD, BET-BJH, SEM, EDX, TEM, TGA, CO 2 -TPD, and Raman spectroscopy analyses. The results of CO 2 -TPD and Raman confirmed that the dispersion of ZnO is well incorporated in the structure of αFe 2 O 3 , increasing the basicity of the nanocatalyst via generating oxygen vacancy. The response surface methodology (RSM) and Box behnken design (BBD) were utilized to analyze the effect of parameters. The best incorporation of ZnO on catalytic performance was observed in x = 47.24 wt%. Besides, the size and shape of the optimized nanocatalyst were 40 nm and needle/hexagonal, respectively. The optimization of the reaction demonstrated the maximum biodiesel yield of 94.21%. Reusability investigation of the optimum catalysts even after seven consecutive cycles revealed that αFe 2 O 3 /ZnO nanoparticles have higher catalytic performance and are more stable than pure αFe 2 O 3. The results of the engine test indicate that the rich oxygen amount of canola biodiesel leads to considerable improvements in fuel combustion conditions, particularly in B30 (30% biodiesel-70% diesel). [Display omitted] • Successful application of Fe2O3/ZnO nanocatalyst in transesterification reaction. • Incorporation of ZnO on αFe2O3 NPs significantly enhanced the catalyst activity. • RSM base on BBD was employed analyzing and optimizing process variables. • At optimal conditions, the biodiesel yield was obtained as 94.21%. • Canola biodiesel improved the CI engine parameters particularly in B30. [ABSTRACT FROM AUTHOR]