Quite recently, the use of Jatropha oil as a renewable fuel for road transport has gained special attention by various stakeholders worldwide who are advocating the use of renewable fuels in the road transportation sector. There are many success stories in using Jatropha oil as renewable fuel in Africa. In Tanzania, D1 Oils Limited is making strides in developing the Jatropha plant as a source of renewable fuel for road transport. The ARI Monduli project is also using Jatropha plant products to solve rural energy problems. Apart from these developments to exploit Jatropha oil as a fuel for road transport, this study reveals the following policy challenges that need to be addressed in order to deploy Jatropha technology as a viable renewable fuel for road transport in Tanzania. Firstly, there is a monopoly orientation for Jatropha development in Tanzania. Secondly, some important stakeholders, such as policy makers and Jatropha product users, lack information on Jatropha development and usage. Thirdly, there is a lack of both short term and long term financing for Jatropha development for rural dwellers in Tanzania. Finally, there is lack of a local market for Jatropha fuel and no appropriate contractual framework in Tanzania. The study suggests specific recommendations for each policy challenge.