This study investigated the production of biodiesel from palm kernel oil using heterogeneous catalyst. It involved characterization of the oil and production of biodiesel using palm kernel oil. Physicochemical properties of density, saponification, acid, free fatty acid, iodine and peroxide of the oil were determined. Biodiesel was produced by transesterification process using MgO as heterogeneous catalyst. Effects of process variables on biodiesel yield were evaluated, and the yield was optimized using response surface methodology (RSM). Properties of the biodiesel (specific gravity, kinematic viscosity, acid, flash point, pour point, cloud point, calorific value, moisture content and refractive index) were determined. Analysis of the results showed that palm kernel oil possesses physio-chemical properties suitable for biodiesel production. Moderate free fatty acid of 3.23 % oleic acid and saponification value 194.1 mg/g were obtained. Temperature, methanol/oil ratio, catalyst concentration and time influenced the biodiesel yield. Quadratic model adequately described the relationship between the biodiesel yield and the considered factors. Optimum biodiesel yield from palm kernel oil was recorded as 93.08% at temperature of 55oC, methanol/oil ratio of 5, catalyst concentration of 0.7 wt.% and time of 50 minutes. Specific gravity, kinematic viscosity, acid, flash point, pour point, cloud point, calorific value, moisture content, and refractive index values of the biodiesel are within the specified international standards.