To surmount challenges posed by homogeneous and heterogeneous single catalysts, this review systematically examines innovations of hybrid catalysts that integrate multiple catalytic functionalities to enhance catalytic efficiency, stability, and reusability in biodiesel production. Although hybrid catalysts may involve higher upfront costs due to using multiple materials and more complex synthesis routes, they can be availed in lower dosages and demonstrate superior reusability and regenerability, thereby substantially improving the overall feasibility, sustainability, and economic performance in biodiesel production. Recent advancements in hybrid catalyst design have confirmed notable improvements in thermal stability, resistance to leaching, and catalytic activity, resulting in enhanced biodiesel productivity and consistent fuel quality. This review further evaluates life cycle analysis (LCA) and techno-economic analysis (TEA) outcomes and future prospects of hybrid-catalyzed biodiesel to assess their viability from economic, environmental, and technical perspectives. Particular emphasis is placed on utilization of enzymes and biomass-derived hybrid biocatalysts, which offer a sustainable and cost-effective alternative while delivering high catalytic performance. Additionally, emerging role of ionic liquids (ILs) as eco-friendly catalysts and co-solvents is critically examined. Attributed to their tunable physicochemical properties, high thermal stability, negligible volatility, and excellent recyclability, ILs-impregnated hybrid catalysts have allowed exceptional oil conversion efficiency, biodiesel yield exceeding 95% with ten consecutive cycles. Synergistic interaction between hybrid catalyst and ILs enhances reaction kinetics and biodiesel productivity, mitigates catalyst deactivation caused by strong Brønsted-Lewis acidity and interionic attractions. Finally, this study outlines future research directions and technological challenges, offering novel insights and innovation pathways for next-generation scientists, researchers, and engineers.