The production and consumption of avocado pears generates tons of wastes, mainly the pear peels which are usually discarded, although they have been reported to contain important phyto-chemicals with biological activities. The adverse health effect associated with the consumption of saturated lipid based foods has ignited research on reformulation of lipid based foods to eliminate Trans Fatty Acids (TFAs). This study was thus aimed at the extraction and characterization of oil from Avocado Peels (APO) and evaluation of the quality of margarine produced from it. Five verities of pear were used for oil extraction by soxhlet method and physiochemical, oxidative, functional and antioxidant characterization was done. Margarines were formulated using a central composite design using oil blends of APO and Virgin Coconut Oil (VCO) with an oil ratio of 10:90, 40:60, 70:30 respectively, varied blending speed, blending time, and chitosan concentration. Samples were characterized and the effect of process parameters on the physiochemical and functional properties of the margarine studied. Optimized conditions were used to produce samples for sensory evaluation. Color, spreadability, aroma, taste and general acceptability was evaluated using ranking difference test. The results showed that the yield, density, and iodine values of APOs oils ranged from 14.