Lubricant base stocks of acylated oil and its derivatives, namely, propionylated, butanoylated, and hexanoylated karanja oil and fatty acid methyl esters, were synthesized from renewable nonedible source karanja oil (Pongamia glabra). The reaction was carried out by Prilezhaev dihydroxylation, an in situ peroxyformic acid generated using hydrogen peroxide and formic acid. The hydroxylated derivatives were acylated with three acid anhydrides (C-3, C-4, and C-6). All of the synthesized products were examined for their purity by GC and GC-MS and characterized by IR and H-1 NMR spectral studies. The acylated derivatives were evaluated for physicochemical and lubricant properties. Propionylated and butanoylated esters of KFAME were found suitable as IS: 3098 hydraulic fluids in ISO VG 46 and ISO VG 68 categories, respectively. In addition, propionylated esters of KFAME are also suitable as IS: 8406 gear oils (R&O type). Other lubrication properties such as viscosity, viscosity index of all products belonging to group HI, category of base fluids as per API classification, Cu corrosion value, weld point, and air release value were found to be good. These base stocks may find applications in hydraulic fluids and metal-working fluids.