A series of Mg-Zr catalysts with varying Mg to Zr ratios was prepared by co-precipitation method. These catalysts were characterized by BET surface area, X-ray diffraction, X-ray photo electron spectroscopy and temperature programmed desorption of CO2. The catalytic activity of these catalysts was evaluated for the room temperature transesterification of both edible and non-edible oils to their corresponding fatty acid methyl esters. The catalyst with Mg/Zr (2:1 wt./wt.%) exhibited exceptional activity towards transesterification reaction within short reaction time. The effects of different reaction parameters such as catalyst to oil mass ratio, reaction temperature, reaction time and methanol to oil molar ratio were studied to optimize the reaction conditions. The reasons for the observed activity of these catalysts are discussed in terms of their basicity and other physico-chemical properties. (C) 2008 Elsevier B.V. All rights reserved.