Hydrolysis of acid oils is an important alternative for the production of non-ionic surfactants and fatty acids that can be converted to fatty acid methyl esters (biodiesel) by esterification. In this work, hydrolysis of palm oil was initially carried out in subcritical water using zinc stearate as catalyst. The experiments were performed in a CSTR-type reactor where the effect of temperature (140-190 degrees C), palm oil-to-water MR (1:10-1:53) and catalyst amount (2-10 wt%) were evaluated. High contents of free fatty acids (up to 60 wt%) with 35 wt% diacylglycerols and 20 wt% monoacylglycerols were obtained. Also, zinc stearate maintained its catalytic activity for palm oil hydrolysis for five consecutive reuse cycles but changes in the catalyst chemical composition were observed, mostly due to the conversion of zinc stearate to zinc palmitate. However, by increasing the reaction time from 4 to 8 h at 190 degrees C, there was a decrease in the accumulation of free fatty acids and an increase in the accumulation of acylglycerols and this was a strong evidence for reaction reversion. After removal of water, palm oil hydrolysates still containing the reaction catalyst were subjected to simultaneous esterification and transesterification under similar reaction conditions, reaching a final monoester content of about 90 wt%. These values are 50 wt% higher than those obtained by direct transesterification using the same catalyst. Also, the resulting crude glycerin phase was colorless in appearance, indicating little contamination with reaction products and intermediates.