The transesterification was carried out using KOH loaded on bentonite as a heterogeneous catalyst. The effects of reaction parameters, such as reaction time, % K loading, reaction temperature, molar ratio of methanol to oil, and amount of catalyst, were optimized for the production of biodiesel. The 25 wt% K/bentonite catalysts gave a biodiesel yield of 94.13% at 60 ℃ within 3 h at a 1:15 molar ratio of palm oil to methanol and a catalyst amount of 3 wt%. The results showed that the catalyst having highest basicity exhibited the highest biodiesel yield. The catalyst was characterized by using XRD, FTIR, SEM-EDS, TPD, BET, and Hammett indicator. In addition, the effect of calcination temperature of the catalyst on the biodiesel yield was also studied.