Increasing demand and the rising cost of fossil fuels, as well as a concern for global climate change have shifted global efforts to utilize renewable resources for the production of a 'greener' energy replacement. Biodiesel, a renewable fuel produced by transesterification of animal fats and vegetable oils, generates about 10% (v/v) of crude glycerol as a core by-product. Consequently, the recent booming of biodiesel industry all over the world has generated a large amount of crude glycerol, creating an oversupply problem. The economic feasibility of the biodiesel industry has been crucially affected due to a high volume (by worldwide surplus) of crude glycerol generated from the biodiesel production process. Consequently, with the increasing number of biodiesel production plants, a large number of glycerol production plants can be expected to be shut down within a few years due to the price drop that will result from the oversupply of glycerol. Therefore, this abundance of glycerol provides an opportunity for the development of new commercial uses. Glycerol, a core by-product of biodiesel production has become an inexpensive and easily obtainable product for which new applications have to be discovered. At present, there is a lack of microorganisms which can efficiently convert crude glycerol to value-added bio-products. The new isolate of bacteria that would permit screening, isolation and over-expression of enzyme would help overcome these challenges. Thus, this research is to identify novel bacterial strains which are capable of efficiently converting glycerol aerobically, and improve the strains for large scale production of value-added products. In Chapter 2 and 3, this study shows a number of bacterial strains isolated from environmental consortia were screened for their capability of converting low or negative-value biodiesel-derived crude glycerol to value-added products. Primarily, an aerobic batch biotransformation process was carried out to observe the kinetics of glycerol dehydrogenase (GDH) activity, bio-product formation and glycerol utilization. Therefore, the major bio-product obtained from this biotransformation of glycerol was 2,3-butanediol (2,3-BD) with minor co-products including acetoin, 1,3-propanediol (1,3-PDO) and acetate. In this study, three bacterial species Klebsiella pneumoniae, K. variicola and Serratia liquefaciens newly isolated from soil and paper mill waste were the highest producers of 2,3-BD. The novel strains K. pneumoniae SRP2 and, K. variicola SRP3 were used to construct a co-culture, capable of simultaneously converting crude glycerol to concurrently produce up to 27.87 g/L of 2,3-BD, yielding 0.73g 2,3-BD per gram glycerol (0.73g/g) using 37.0 g/L glycerol under aerobic conditions in batch culture, showing great potential for biotransformation bioprocess. Therefore, an attempt has been made to produce a major product 2,3-butanediol (2,3-BD) from glycerol as a sole carbon source using newly isolated novel bacterial strains Klebsiella variicola SRP3 and K. pneumoniae SRP2 in a series of batch and fed-batch processes under aerobic process. These studies also compare the bacterial cell biomass, bio-products and a key enzyme glycerol dehydrogenase (GDH) production of K. variicola SRP3 and K. pneumoniae SRP2 isolated from paper mill waste when grown in aerobic condition. The incubation temperature, pH, glycerol concentration and nitrogen sources were the most important factors ruling the GDH. This study also revealed that an increased GDH activity led to a substantially enhanced production of 2,3-BD as a principal product with 1,3-propanediol (1,3-PDO), acetoin and acetate as minor. In Chapter 4-6, the studies of high production of 2,3-butanediol (2,3-BD) from pure and biodiesel derived crude glycerol using an ethyl methanesulfonate (EMS) mutant K. pneumoniae SRM2, and two adapted mutants K. variicola SRM3 and K. variicola SW3 developed from the newly isolated wild type strains K. pneumoniae SRP2 and K. variicola SRM2 respectively are reported. However, as stated in Chapter 4, an adapted mutant strain K. variicola SRM3 withstanding 200 g/L glycerol could efficiently convert glycerol to 29.87 g/L 2,3-BD and 7.08 g/L acetoin from 50.0 g/L glycerol in a batch culture, and an acidic initial pH (pH 5.0) led to enhanced 1.3-fold increased GDH activity of 721.5 units/mg protein from 558.2 units/mg protein.