Abstract The main purpose of the present research is to develop an environmentally more attractive process for the production of biodiesel by using a magnetic separable solid catalyst. To achieve this, hydroxyapatite-encapsulated γ-Fe 2 O 3 nanoparticles (HAp-γ-Fe 2 O 3 ) were prepared, and organic biguanide was then bound to the magnetic carrier via covalent attachments. The magnetic carrier and biguanide-functionalized HAp-γ-Fe 2 O 3 were fully characterized by X-ray powder diffraction (XRD), Fourier transform infrared (FT-IR) spectra, energy dispersive X-ray (EDX) analysis, transmission electron microscopy (TEM), vibrating-sample magnetometer (VSM) and nitrogen adsorption–desorption techniques. Results demonstrated that the biguanide was successfully immobilized on the HAp-γ-Fe 2 O 3 without damage to the morphology and structure of the HAp-γ-Fe 2 O 3 carrier. The so-prepared inorganic-organic hybrid nanocomposites exhibited a strong magnetic response and displayed better catalytic activities in the transesterification of soybean oil with methanol for the production of biodiesel. By using the methanol/oil molar ratio of 25:1 and catalyst loading of 3 wt%, the maximum oil conversion of 99.6% was achieved over the solid base catalyst at reflux of methanol after 3 h of reaction. Further, the solid catalyst could be recovered facilely by simple magnetic separation and maintains satisfactory catalytic activity after being recycled for five times.