In this study, the main target was to obtain the liquid fuel‐like product from the catalytic cracking of the used transformer oil over bentonite as a low‐cost catalyst. For this aim, a series of cracking runs were performed under certain experimental conditions (450 °C cracking temperature, 10 °C/min of heating rate, and catalyst in the range of 0–8.0 wt %) in a fixed‐bed reactor. In catalytic cracking runs, the use of bentonite as a catalyst led to a considerable increase in yield of the cracking oil comparable to that of the noncatalytic oil. The highest yield value of 98.64 wt % was achieved at catalyst ratio of 4.0 wt %. Furthermore, the liquid product obtained in the highest yield was characterized by FTIR and GC–MS to evaluate its composition in terms of compound distributions as a comparison with the noncatalytic run. Also, its fuel properties such as cetane index, higher heating value, viscosity, density, water content, elemental content, and so forth were analyzed using standard test techniques. Based on these results obtained, the catalytic liquid product can be utilized to prepare liquid fuel blends with diesel for the diesel engines. © 2018 American Institute of Chemical Engineers Environ Prog, 38:e13080, 2019