In this research, a highly effective rGO@CaO/NiO bifunctional nanocatalyst was synthesized and utilized for the generation of biodiesel from degraded waste oil (DWO) through microwave assistance. A comprehensive analysis was conducted to assess the catalyst structure, revealing a notable specific surface area with significant surface characteristics for the rGO@CaO/NiO bifunctional nanocatalyst. The maximum biodiesel yield was achieved 97.46% under optimum conditions including methanol to oil ratio of 11.1 mol/mol, catalyst content of 3 wt.%, microwave time of 7.5 min, and stirring speed of 700 rpm. The catalyst's reusability was demonstrated through multiple cycles, maintaining high stability and consistent biodiesel yield over seven iterations. The activation energy and exponential factor for the conversion of DWO to biodiesel were determined as 30.91 kJ/mol and 2.3×104 min-1, respectively. The physical attributes of DWO-derived biodiesel revealed that they fall within the ASTM D6751 standard range. The impact of adding biodiesel to petrodiesel/biodiesel blends at various torques on the emission of key pollutants (CO, NOx, CO2, and UHC) and engine performance (BP, EGT, BTE, and BSFC) was investigated, yielding promising results. The rGO@CaO/NiO appears as a superior choice for biodiesel production, offering exceptional reusability, and significant biodiesel efficiency achieved within a short reaction time.