Fatty acid methyl esters (FAME) were produced from palm oil using eggshell modified with magnesium and potassium nitrates to form a composite, low-cost heterogeneous catalyst for transesterification. The catalyst, prepared by the combination of impregnation/co-precipitation was calcined at 830 C for 4 h. Transesterification was conducted at a constant temperature of 65 C in a batch reactor. Design of experiment (DOE) was used to optimize the reaction parameters, and the conditions that gave highest yield of FAME (85.8%) was 5.35 wt.% catalyst loading at 4.5 h with 16:1 methanol/oil molar ratio. The results revealed that eggshell, a solid waste, can be utilized as low-cost catalyst after modification with magnesium and potassium nitrates for biodiesel production. (C) 2011 Elsevier Ltd. All rights reserved.