The demand for biodiesel and biodiesel blends as a fuel source has increased exponentially in the last decade. Water is the most significant contaminant in biodiesel-handling facilities (pipeline, storage tanks on the land, and fuel storage tanks on ships). Corrosion performance of materials in these facilities in biodiesel needs to be understood well to ascertain the facility integrity. The highly resistive nature of biodiesel imposes a great challenge in using the conventional electrochemical techniques for corrosion evaluation, even in the presence of water. Multielectrode array technique was demonstrated to be useful in evaluating the corrosion of steel in both the biodiesel phase and the water phase that is overlaid by the biodiesel phase. This work demonstrated that the corrosion rate in biodiesel phase is low. However, the biodiesel does influence the corrosion rate in the water phase when it is in contact. Appreciable corrosion was observed on the steel exposed to the water phase below a biodiesel layer, likely because of the diffusion of corrosive species (e.g., chloride) from the biodiesel phase into the water phase.