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The paper begins with a review of the background to the original development of biodegradable oils in response to concerns over pollution from outboard motors. Subsequently biodegradable oils have been developed, for applications other than outboard motor oils, to limit the impact of oils which are either intentionally or accidentally released into the environment. The available test methods are reviewed and comment made on the current lack of entirely satisfactory test methods. The paper outlines the compromises which may be necessary in formulating a biodegradable oil and the care needed in handling such products. A review of current legislation, outside North America, on the use of biodegradable oils is provided. Finally a set of simple guidelines is given for assessing the suitability of biodegradable oils in specific applications and the related question of overall environmental performance of lubricating oils.