The main obstacle in biodiesel used in internal combustion engine is oxidation instability due to presence of unexpected high unsaturation and it produces adverse effects like sludge formation, rise in acid value, etc. These effects cause engine problems like fuel filter blockage, choking of injector, which causes misfiring or hard starting, deposition in injector pump, etc. To solve these problems, antioxidants are mixed to increase the oxidation stability of biodiesel. Hence, the study aimed to review the work done by various researchers and study the effect of various antioxidants on oxidation stability, methods used to determine the oxidation stability, and factors affecting engine performance of biodiesel (vegetable oils or animal fats, etc), so that this manuscript could become the torchbearer for the futuristic researchers working in the domain of biodiesel production. From the literature review it is noticed that for most of the biodiesel samples, Propyl gallate is the best antioxidant. In addition, the analysis of the IR spectra is an economical, efficient, simple, fast and non-destructive technique to determine the oxidation stability of biodiesel.