The primary objective of this work was to investigate the thermal and rheological properties of crude tall oil (CTO), a low-cost by-product from the Kraft pulping process, as a potential feedstock for biodiesel production. Adequate knowledge of CTO properties is a prerequisite for the optimal design of a cost-effective biodiesel process and related processing equipment. The study revealed the correlation between the physicochemical properties, thermal, and rheological behavior of CTO. It was established that the trans/esterification temperature for CTO was greater than the temperature at which viscosity of CTO entered a steady-state. This information is useful in the selection of appropriate agitation conditions for optimal biodiesel production from CTO. The point of interception of storage modulus (G′) and loss modulus (G′′) determined the glass transition temperature (40 °C) of CTO that strongly correlated with its melting point (35.3 °C). The flow pattern of CTO was modeled as a non-Newtonian fluid. Furthermore, due to the high content of fatty acids (FA) in CTO, it is recommended to first reduce the FA level by acid catalyzed methanolysis prior to alkali treatment, or alternatively apply a one-step heterogeneous or enzymatic trans/esterification of CTO for high-yield biodiesel production.