Wet torrefaction emerges as a potential biomass pretreatment process to enhance the fuel properties of biomass. The present research was aimed to determine the energy-efficient conditions for the wet torrefaction of palm kernel shell via response surface methodology. The inherent relationship between fuel properties and operating conditions such as temperature (180–220 °C), residence time (10–30 min), and the palm kernel shell (PKS)/water ratio (0.1:0.2) was investigated, and temperature was observed to be the most significant parameter. Higher heating value of PKS was increased from 18.9 to 23.4 MJ/kg after torrifying at 220 °C, 30 min, and a water-to-biomass ratio at 0.2. The outcome of thermal analysis confirmed that wet-torrefied PKS exhibited an improved combustion behavior. The highest value of the comprehensive performance index for torrefied PKS was 5.687 × 10–10 min–2 °C–3. Wet torrefaction improved the fuel properties of PKS as the torrefied biomass had a higher carbon content, lower oxygen content, and lower ash content than raw PKS.