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Biodiesel is considered to be a sustainable alternative for fossil fuels such as petroleum-based diesel. However, we still lack knowledge about the impact of biodiesel emissions on humans, as airways and lungs are the primary target organs of inhaled toxicants. This study investigated the effect of exhaust particles from well-characterized rapeseed methyl ester (RME) biodiesel exhaust particles (BDEP) and petro-diesel exhaust particles (DEP) on primary bronchial epithelial cells (PBEC) and macrophages (MQ). The advanced multicellular physiologically relevant bronchial mucosa models were developed using human primary bronchial epithelial cells (PBEC) cultured at air–liquid interface (ALI) in the presence or absence of THP-1 cell-derived macrophages (MQ). The experimental set-up used for BDEP and DEP exposures (18 µg/cm2 and 36 µg/cm2) as well as the corresponding control exposures were PBEC-ALI, MQ-ALI, and PBEC co-cultured with MQ (PBEC-ALI/MQ). Following exposure to both BDEP and DEP, reactive oxygen species as well as the stress protein heat shock protein 60 were upregulated in PBEC-ALI and MQ-ALI. Expression of both pro-inflammatory (M1: CD86) and repair (M2: CD206) macrophage polarization markers was increased in MQ-ALI after both BDEP and DEP exposures. Phagocytosis activity of MQ and the phagocytosis receptors CD35 and CD64 were downregulated, whereas CD36 was upregulated in MQ-ALI. Increased transcript and secreted protein levels of CXCL8, as well as IL-6 and TNF-α, were detected following both BDEP and DEP exposure at both doses in PBEC-ALI. Furthermore, the cyclooxygenase-2 (COX-2) pathway, COX-2-mediated histone phosphorylation and DNA damage were all increased in PBEC-ALI following exposure to both doses of BDEP and DEP. Valdecoxib, a COX-2 inhibitor, reduced the level of prostaglandin E2, histone phosphorylation, and DNA damage in PBEC-ALI following exposure to both concentrations of BDEP and DEP. Using physiologically relevant multicellular human lung mucosa models with human primary bronchial epithelial cells and macrophages, we found BDEP and DEP to induce comparable levels of oxidative stress, inflammatory response, and impairment of phagocytosis. The use of a renewable carbon-neutral biodiesel fuel does not appear to be more favorable than conventional petroleum-based alternative, as regards of its potential for adverse health effects.