The fast-food giant has pledged to run its 155 UK delivery lorries on biodiesel made from cooking oil collected from its restaurants by the end of the year.
McDonald's, which has been running its lorries on 95% diesel and 5% biodiesel, said it will combine 85% biodiesel and 15% rape-seed oil initially, to save more than 1,650 tonnes of carbon every year.
Matthew Howe, senior vice-president of McDonald's, said that the move was a great example of how businesses can work together to help the environment.
The company expects the cost of using biodiesel to be slightly more in the short term but to be the same as its diesel costs in the long term.
McDonald's has faced criticism about its environmental record for many years and claims to be working on a number of other initiatives covering packaging and recycling to reduce its carbon emissions.
In January, this year it signed a £1m deal to buy coffee from South and Central American farm cooperatives certified by the Rainforest Alliance, an independent ethical trade watchdog.