This study examines the impact of production of biofuels on food security, socio-economy and the environment in six districts of Tanzania namely Rufiji, Kisarawe, Bagamoyo, Lindi, Kilwa and Arusha. The findings are later considered in the context of the whole country. Specifically, this study identifies companies or investors engaged in the production of biofuels in Tanzania; presents a critical review of the national guidelines for sustainable development of liquid biofuels and co-generation in Tanzania; identifies policies through which the government is pushing the production of biofuels in the country; and finally draws some policy recommendations for a sustainable production of biofuels in Tanzania.