An efficient technique for increasing the transesterification activity of CaO obtained from calcination of CaCO(3) was proposed in order to make them highly suitable for use as heterogeneous catalysts for biodiesel production. CaO was refluxed in water followed by the synthesis of the oxide from hydroxide species. The characterization results indicate that this procedure substantially increases both the specific surface area and the amount of basic site. Hydration and subsequent calcination also generates a new calcium oxide with less crystalline. Transesterification of palm olein was used to determine the activity of catalysts to show that the decomposed-hydrated CaO exhibits higher catalytic activity than CaO generated from calcination of CaCO(3). The methyl ester content was enhanced 18.4 wt. % (C) 2009 Elsevier Ltd. All rights reserved.