Grease trap waste (GTW) is a low-quality waste material with variable lipid content that is an untapped resource for producing biodiesel. Compared to conventional biodiesel feedstocks, GTW requires different and additional processing steps for biodiesel production due to its heterogeneous composition, high acidity, and high sulfur content. Life-cycle assessment (LCA) is used to quantify greenhouse gas emissions, fossil energy demand, and criteria air pollutant emissions for the GTW-biodiesel process, in which the sensitivity to lipid concentration in GTW is analyzed using Monte Carlo simulation. The life-cycle environmental performance of GTW-biodiesel is compared to that of current GTW disposal, the soybean-biodiesel process, and low-sulfur diesel (LSD). The disposal of the water and solid wastes produced from separating lipids from GTW has a high contribution to the environmental impacts; however, the impacts of these processed wastes are part of the current disposal practice for GTW and could be excluded with consequential LCA system boundaries. At lipid concentrations greater than 10%, most of the environmental metrics studied are lower than those of LSD and comparable to soybean biodiesel.