The global market based measure (MBM) for international flight emissions is poised for launch in 2020, creating additional pressure for improvements of aviation environmental performance. Due to high R&D costs and long lifecycle of aircrafts, drop-in biofuels stand as a promising solution for addressing aviation's environmental sustainability. The transition to commercial aviation biofuels remains stagnant, however, despite the continuing progress made in overcoming technological and economic challenges of aviation biofuels. This paper investigates the key barriers and opportunities for biofuels transition from a comprehensive socio-technical standpoint. A multi-level perspective (MLP) system dynamics model of aviation biofuel industry is developed to investigate the adoption process. We assess the interactive mechanisms between existing regimes, landscape pressures, and niche innovations, and propose four possible scenarios of aviation biofuel adoption. From this, we provide policy recommendations and industry level strategies for accelerating the transition to aviation biofuels that balance environmental sustainability and economic benefits.