CaO–CeO₂ catalysts were successfully synthesized by simple gel formation viaco-precipitation and used as an active and stable catalyst for the production of a clean and green alternative fuel – biodiesel – via transesterification of palm oil and methanol. Among a series of CaO–CeO₂ catalysts, the 1Ca1Ce catalyst performed the best performance (with FAME yield >90% after 2 h) due to its high surface total basicity and base strength. The 1Ca1Ce catalyst showed negligible leaching of catalyst components due to the good interaction between calcium and cerium species in the solid catalyst. The leaching of catalyst could be reduced by increasing calcination temperature; however, the catalyst lost its total basicity at very high calcination temperature. Therefore, the 1Ca1Ce catalyst calcined at 650 °C was the optimum catalyst for transesterification as the catalyst has low leaching of catalyst components but high total basicity. In addition, the catalyst could be reused up to 18 cycles without significant loss of performance (FAME yield >90%). The dissolved calcium and cerium contents in the biodiesel product were already less than 5 ppm after the 10th cycle. These results suggest that 1Ca1Ce is a promising catalyst for a green and durable biodiesel production process.