The esterification of palm fatty acid distillate (PFAD), a by-product from palm oil industry, in the presence of three modified zirconia-based catalysts i.e. SO4-ZrO2, WO3-ZrO2 and TiO2-ZrO2 (with several sulfur- and tungsten-loading contents, Ti/Zr molar ratios, and calcination temperatures) was studied. It was found that, among all synthesized catalysts, the reaction in the presence of SO4-ZrO2 and WO3-ZrO2 (with 1.8%SO4 calcined at 500 degrees C and/or 20%WO3 calcined at 800 degrees C) enhances relatively high fatty acid methyl ester (FAME) yield (84.9-93.7%), which was proven to relate with the high acid site density and specific surface area as well as the formation of tetragonal phase over these catalysts. The greater benefit of WO3-ZrO2 over SO4-ZrO2 was its high stability after several reaction cycles, whereas significant deactivation was detected over SO4-ZrO2 due to the leaching of sulfur from catalyst. For further improvement, the addition of toluene as co-solvent was found to increase the FAME yield along with reduce the requirement of methanol to PFAD molar ratio (while maintains the FAME yield above 90%). Furthermore, it was observed that the presence of water in the feed considerably lower the FAME yield due to the catalyst surface interfering by water and the further hydrolysis of FAME back to fatty acids. We proposed here that the negative effect can be considerably minimized by adding molecular sieve to remove water from the feed and/or during the reaction. 2010 Elsevier B.V. All rights reserved.