Fatty acid methyl esters (FAMEs) derived from plant oils are excellent lubricant improvers, but they do not have desirable oxidative stability and cold-flow properties. This study investigated phenol hydrodeoxygenation in hexadecane and aromatic alkylation of FAMEs over a K30 montmorillonite catalyst to give phenyl-branched FAME (PBFAME) as a potential lubricant improver. The high selectivity to aromatic hydrocarbons during hydrodeoxygenation over Pd/C was likely due to the slow hydrogenation rate of phenols in hexadecane, absence of hydrogen bonding in nonpolar solvents allowing hydroxyl groups to participate in dehydration reactions, and limited diffusion of hydrogen from bulk solution to Pd sites. Isomers of methyl (methylphenyl)octadecanoate (n-MMPO) were produced during toluene alkylation of methyl oleate. The presence of both Bronsted and Lewis acid sites in K30 facilitated selective synthesis of n-MMPOs. The oxidative stability and cold-flow properties of n-MMPO were better than those of canola biodiesel.