Amino acid ionic liquid (AAIL) based on alanine, 1-n-heptyl-3-methylimidazolium alanine ([C7mim][Ala]), has been prepared and characterized. Since the IL can form strong hydrogen bonds with water, trace amount of water is a problematic impurity in the IL. Using the standard addition method (SAM), the densities were measured in the temperature range from 293.15 to 343.15±0.05 K. On the basis of the experimental data of density, the surface tension y, molar volume, and the molecular vol- ume Vm, molar enthalpy of vaporization AIgHm0, and the thermal expansion coefficients or, for [C7mim][Ala] were estimated using semi-empirical methods. Also the interstice model has been verified with good accordance. Then the [C7mim][Ala] was taken as catalyst in the transesterification reaction with fatty acid, where soybean oil was used as raw material and methanol as reactant. The amount of catalyst, alcohol consumption, reaction time, temperature and other factors of the reaction were inves- tigated. Using GC determination, the conversions were calculated by the internal standard method. The main ingredients of the products were identified by GC-MS as palm methyl ester and linoleic acid methyl ester only, which showed high selectivity in palmitic acid and linoleic acid.