The palm oil industry has been positively grown, becoming the largest crop-based sector in Malaysia covering 33.7 of total palm oil exports to the world. The parametric study of the oil extraction from palm oil mill effluent (POME) has never been done before. Therefore, four organic solvents including n-hexane, methanol, ethanol, and toluene were used in soxhlet extraction to extract the oil. For each solvent, the effect of oil to solvent ratio, mixing time and agitation speed were studied to determine the optimum conditions giving maximum oil recovery. Results indicated that n-hexane exhibited the highest oil recovery with n-hexane to POME ratio of 1:1. The oil extraction yield of 90 was achieved from POME at the optimized conditions of agitation speed of 500 rpm, pH of 10, and 25 min of mixing time. The use of residual oil extracted from POME has not been studied before on the Aspen Plus simulator to optimize the alcoholysis process. Therefore, the performance of extracted oil as a substrate was studied using a batch reactor via conventional heating along with the simulation results. The optimized parameters for biodiesel synthesis were oil to alcohol molar ratio of 1:10, the reaction time of 2.5 h, reaction temperature of 60 �, and catalyst loading of 1.5 wt giving an experimental yield and simulation yield of 93 and 91, respectively. However, the investigation of input and output parameters of the transesterification process is still needed using a response surface methodology optimizer. The use of POME could lead to cheaper biodiesel production if it is further explored and implemented as a substrate for the industrial synthesis of biodiesel. © 2021 Elsevier Ltd.