Shape memory polyurethane (SMPU) has found application in a variety of field such as textile, sensors, structural and food industry due to its unique and composition dependent properties. However, most SMPU are synthesised using petroleum-based raw materials. This has triggered the effort in finding an alternative source of raw materials due to the environmental awareness. For this purpose, SMPU was synthesised based on palm kernel oil polyol (PKO-p) up to 40% molar ratio in replace of petroleum-based polyol, polycaprolactone diol (PCL). SMPU was synthesised via two-step bulk polymerisation process incorporated with PKO-p, PCL as the switching segment, 4,4-methylene-bis (cyclohexyl isocyanate) and 1,4-butanediol. The SMPU were characterised by Fouriertransform infrared (FTIR) spectrometer, differential scanning calorimetry (DSC), tensile and shape memory test. The incorporation of PKO-p has enhanced the shape memory behaviour and tensile properties. The degree of soft segment crystallinity increased with the addition of PKO-p, hence improved its ability to fix the temporary shape upon cooling. Besides, the shape recovery remains 100% even at 40% of PKO-p suggesting the presence of sufficient amount of physical crosslinking to hold the permanent shape. On the other hand, SMPU at 10% molar ratio of PKO-p showed high tensile strength and elongation at break.