Waste oil treatment was attempted using a compost fermentation process. To develop a simple method for waste oil treatment, cheap and simple materials were used as compost materials. The fermentation experiment was performed using a domestic composter to determine the optimum conditions of the fermentation. Adjustment of the pH value during the compost fermentation was also important for progression of the oil degradation. When the pH value was not controlled, the pH value decreased quickly and reached about 2 and the oil degradation was stopped. Adding caustic lime to the raw materials caused the pH value of the compost to stabilize at approximately 7. The addition of a nitrogen source had a large effect on oil degradation during the compost fermentation. The optimum value of the C/N ratio of the raw materials with pH control was between 10 and 40. When the C/N ratio of the materials was adjusted to 10, 20, and 40, the rate constants for oil degradation were very similar. The rate constants for NH4+ consumption were also similar. Oil degradation efficiency reached 83.5% relative to the initial oil content in the compost materials. Repeated batch operation of the compost fermentation was carried out and the compost system could maintain good efficiency for oil degradation over several repeated batch operations. Finally, the compost system was applied to the treatment of recalled mayonnaise, with favorable results being obtained.