Atropha is a potential source for production of bio-diesel and an alternative source for fossil fuels. The present study is undertaken for the analysis of storage fungi and its biodiversity in Jatropha seed samples collected from local market and research institutes in Chennai. Standard plating technique was used to study the growth of storage fungi in seeds stored for 12 to 60 months by using selective media called osmophilic media. The analysis of storage fungi in seeds with different treatments to observe as (1) surface mycoflora (2) surface invaders (3) internal fungi (4) kernel fungi. The results show that, the occurrence of different species of Aspergillus, Penicillium and Mucor species was the dominant mycoflora even from interior portion of the seeds. Among the species of storage fungi encountered, Aspergillus flavus, Aspergillus niger, Aspergillus glaucus, Aspergillus fumigatus and Penicillium species were frequently present in the order of dominance. Mucor and Rhizhopus also occur constantly in all the samples. The higher contamination of seeds with storage fungi indicates the possibility of quality losses particularly in lipid, which may affect the quality of bio-diesel. Among the different strains of A. flavus, few were found to produce aflatoxin B1. The spoilage of lipids by the named fungi, may affect the quality of bio-diesel. This study will create awareness of fungal spoilage on biodiesel seeds and for remedy to prevent the storage losses by microorganisms. Key words: Storage fungi, Jatropha seeds, Aspergillus spp., Penicillum spp., Mucor sp., Rhizopus sp., Biodiesel, storage losses, aflatoxin.