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SAN DIEGO – In an unmarked greenhouse, leafy bushes carpet an acre of land here tucked into the suburban sprawl of Southern California. The seeds of the inedible, drought-resistant plants, called jatropha, produce a prize: high-quality oil that can be refined into low-carbon jet fuel or diesel fuel.

The mere existence of the bushes is an achievement.

Hailed about six years ago as the next big thing in biofuels, jatropha attracted hundreds of millions of dollars in investments, only to fall from favor as the recession set in and as growers discovered that the wild bush yielded too few seeds to produce enough petroleum to be profitable.

But SGB, the biofuels company that planted the bushes, pressed on. Thanks to advances in molecular genetics and DNA sequencing technology, the San Diego start-up has, in a few years, succeeded in domesticating jatropha, a process that once took decades.

SGB is growing hybrid strains of the plant that produce biofuel in quantities that it says are competitive with petroleum priced at $99 a barrel. Oil is around $100 a barrel.

Call it, as SGB does, Jatropha 2.0.

The company has deals to plant 250,000 acres of jatropha in Brazil, India and other countries expected to eventually produce about 70 million gallons of fuel a year. That has attracted the interest of energy giants, airlines and other multinational companies seeking alternatives to fossil fuels. They see jatropha as a hedge against spikes in petroleum prices and as a way to comply with government mandates that require the use of low-carbon fuels.

“It is one of the few biofuels that I think has the potential to supply a large fraction of the aviation fuel currently used today,” said Jim Rekoske, vice president for renewable energy and chemicals at Honeywell, who has visited the company’s jatropha plantations in Central America.

Mr. Rekoske and biofuel analysts say SGB’s biggest challenge will be to replicate the yields it generates in the greenhouse on a commercial scale.

“Given that this crop has somewhat of a checkered past, ultimately getting growers to plant the crop is going to be the key hurdle,” says Michael Cox, an analyst at Piper Jaffray.

At the greenhouse, the fruits of SGB’s technology are apparent. A typical wild jatropha bush will produce a cluster of six to eight seed-bearing fruits, according to Robert Schmidt, a specialist in corn genetics who is SGB’s chief scientist. He picked up a grapefruit-size cluster growing on a hybrid jatropha plant and counted 37 fruits. “We have examples in Guatemala where we have 60 fruits in a cluster,” Dr. Schmidt said.