The development of bio-polyol from vegetable oil and its derivatives is gaining much interest from polyurethane industries and academia. In view of this, the availability of methyl oleate derived from palm oil, which is aimed at biodiesel production, provides an excellent feedstock to produce bio-polyol for polyurethane applications. In this recent study, response surface methodology (RSM) with a combination of central composite rotatable design (CCRD) was used to optimise the reaction parameters in order to obtain a maximised hydroxyl value (OHV). Three reaction parameters were selected, namely the mole ratio of epoxidised methyl oleate (EMO) to glycerol (1:5–1:10), the amount of catalyst loading (0.15–0.55%) and reaction temperature (90–150 °C) on a response variable as the hydroxyl value (OHV). The analysis of variance (ANOVA) indicated that the quadratic model was significant at 98% confidence level with (p-value > 0.0001) with an insignificant lack of fit and the regression coefficient (R2) was 0.9897. The optimum reaction conditions established by the predicted model were: 1:10 mole ratio of EMO to glycerol, 0.18% of catalyst and 120 °C reaction temperature, giving a hydroxyl value (OHV) of 306.190 mg KOH/g for the experimental value and 301.248 mg KOH/g for the predicted value. This result proves that the RSM model is capable of forecasting the relevant response. FTIR analysis was employed to monitor the changes of functional group for each synthesis and the confirmation of this finding was analysed by NMR analysis. The viscosity and average molecular weight (MW) were 513.48 mPa and 491 Da, respectively.