A thick, gel-like precipitate, which separated from a B20 blend, has been characterized using a variety of analytical techniques. The sediment formed in a blend of soy-based fatty acid methyl ester (FAME) and ultra low sulfur diesel (ULSD), which had been stored under ASTM D4625 conditions without the presence of antioxidant. Analysis indicates that the majority of the sediment consists of a wide variety of polar oxygenated compounds. These vary considerably in molecular weight. The lower molecular weight species arise due to oxidative cleavage of the methyl esters. Also present are free fatty acids formed due to hydrolysis of FAME. The highest molecular weight compounds are oxidized FAME that have not undergone cleavage and oligomers of the oxidized FAME. Monoglycerides and steryl glucosides are not significant components in this sediment. The sediment does contain some diesel fuel, intact FAME, and impurities, which are inherent to the FAME. A proposed scenario for the formation of this type of sediment is as follows: As free radical formation, oxidation, and hydrolysis occur in unsaturated methyl esters, there are numerous polar organic compounds formed. These vary widely in molecular weight and include carboxylic acids, alcohols, aldehydes, and ketones, as well as compounds containing combinations of these functional groups. All of these reaction products undergo aggregation due to their polarity differences with the bulk matrix. Included in these aggregates are the trace components present as impurities in the FAME, such as water, glycerol, glycerides, plant sterols, and steryl glucosides. Eventually, a level of thermodynamic instability is reached and phase separation occurs. While the aggregates and sediment contain significant polar functionality, they still maintain a very high degree of alkyl and olefinic character. As a result, intact FAME and diesel fuel components have a certain degree of solubility in the aggregated mixture and make up part of the precipitated sediment.