Biodiesel is mono alkyl ester derived from vegetable oils through transesterification reaction and can be used as an alternative to mineral diesel. In the present research, methyl ester of rice-bran oil (ROME) is produced through transesterification of rice-bran oil using methanol in presence of sodium hydroxide (NaOH) catalyst. Various properties like viscosity, density, flash point, calorific value of the biodiesel thus prepared are characterized and found comparable to diesel. On the basis of previous research for performance, emission and combustion characteristics, a 20% blend of ROME (B20) was selected as optimum biodiesel blend for endurance test. Endurance test of 100 hours was conducted on a medium duty direct injection transportation diesel engine. Tests were conducted under predetermined loading cycles in two phases: engine operating on mineral diesel and engine fuelled with 20% biodiesel blend. Various tribological studies on lubricating oil samples drawn from both phases after regular intervals were conducted in order to asses the wear of the engine components and to correlate the comparative performance of the two fuels. A number of tests like density measurement, viscosity, flash point, moisture content, pentane and benzene insoluble, TBN (total base number) analysis, atomic absorption spectroscopy and ferrography have been carried out to compare the effect of fuel on the lubricating oil. Experimental results exhibited superior performance of biodiesel blends and less deterioration of lubricating oil with usage. This paper discusses the effect of biodiesel on lubricating oil vis-a-vis mineral diesel.