Abstract An automated on-line approach based on determination of free and bound glycerol was here proposed to monitor biodiesel production. The method was based on liquid–liquid extraction of glycerol from the biodiesel to an aqueous ethanolic phase in which glycerol is oxidized to formaldehyde with meta periodate with subsequent reaction with acetylacetone. The reaction product was photometrically measured at 410 nm. Free and bound glycerol were differentiated by glycerides hydrolysis with potassium ethylate. The experimental set-up consisted of a flow-injection manifold for liquid–liquid extraction without phase separation and iterative change of the flow direction that enabled: (a) filling the flow manifold with a meta periodate–acetylacetone acceptor phase; (b) sampling of small amounts (μl) from the reactor; (c) determination of free glycerol by extraction from biodiesel to the aqueous phase with simultaneous oxidation-reaction with acetylacetone in the acceptor phase; (d) continuous monitoring of the aqueous phase by passage through a photometric detector; (e) filling the flow manifold with a potassium ethylate-meta periodate–acetylacetone new acceptor phase; (d) repetition of steps b-to-d to determine total glycerol after saponification of the bound glycerol by potassium ethylate; and (f) determination of bound glycerol by difference between the second and first analyses. The results showed that the proposed automated on-line method is a suitable option in routine analysis during biodiesel production.