In this study, production of biodiesel from palm oil mill effluent (POME) using immobilized Candida rugosa lipase was optimized using Box-Behnken design (BBD) of response surface methodology (RSM). The optimized parameters chosen were methanol/POME ratio, reaction time, weight of the immobilized beads and agitation speed. The highest yield of both palmitic acid methyl esters (PAME) and oleic acid methyl ester (GAME) was obtained at the following optimum conditions; agitation speed (300 rpm), oil/methanol molar ratio (1:6), incubation period (5 h) and weight of the immobilized beads weight (2 g). The important fuel properties of the biodiesel such as flash point, kinematic viscosity, water and sediment and copper strip corrosion were evaluated according to the American Society for Testing of Materials (ASTM D6751) and European Standard (EN 14214) and were found to be in good agreement with the standard quality and specification. (C) 2018 Published by Elsevier Ltd.