The production of biodiesel from crude palm oil (CPO) using microwave technique is investigated and has been compared with conventional heating. Two-step biodiesel production process is applied to maximize the highest biodiesel yield in short reaction time using microwave method. Sulfuric acid (H2SO4) as acid catalysts is used in pre-treatment of feedstock by esterification process followed by potassium hydroxide (KOH) as base catalyst for transesterification process with low methanol to oil ratio. The main purpose of the pre-treatment process is to reduce the free fatty acids (FFA) content of CPO from higher value of FFA content (>6.8) to a minimum level for biodiesel production (<1). Esterification and transesterification is carried out in fully instrumented and controlled microwave reactor system to get higher yield in shorter time. This two-step esterification and transesterification process showed that the maximum conversion of palm biodiesel obtained is 95.1 with the process conditions of methanol-to-oil molar ratio of 6:1, reaction temperature 65°C, reaction time 15min, and 2 (wt/wt) KOH amount using microwave method compared to conventional heating where the palm oil methyl ester (POME) yield obtained is 81 at the same conditions. The result showed that, the biodiesel production using microwave technique proved to be a fast and easy route to get high yields of biodiesel. © (2014) Trans Tech Publications, Switzerland.