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As the world's two largest economies, the European Union (E.U.) and the United States (U.S.) are dependent on traditional fossil fuels for transportation, and consume more traditional fossil fuels than any other countries, or regions. Hence, for these two regions, dealing with shortages of traditional fossil fuels and battling global climate change are critically important. In recent years, bio-fuel, a much debated and controversial alternative energy source, has been proposed as a solution or a strategic policy tool, in answer to the aforementioned concerns in the transportation sectors of many other countries. The U.S. and the E.U. have developed comprehensive regulations to promote the usage of bio-fuels, such as mandates or direct/indirect subsidies, etc. This article aims to review the history and development of biofuel policies and legislation in U.S. and E.U., such as the "Renewable Energy Directive" and "Renewable Fuel Standard II", and focuses on the sustainable development criteria of biofuel legislation in these regions. [ABSTRACT FROM AUTHOR]