ZSM5 zeolite was impregnated with different KOH loadings (15 wt.%, 25 wt.% and 35 wt.%) to prepare a series of KOH/ZSM5 catalysts. The catalysts were calcined at 500 °C for 3 h and then characterized by N2 adsorption–desorption and X-ray diffraction (XRD) techniques. The catalysts were tested in the transesterification reaction in a batch reactor at 60 °C and under atmospheric pressure. It was found that KOH/ZSM5 with 35 wt.% loading showed the best catalytic performance. The best reaction conditions in the presence of KOH/ZSM5 (35 wt.%) were determined while modifying the catalyst to oil ratio and the reaction time. The highest methyl ester yield (>95%) was obtained for a reaction time of 24 h, a catalyst to oil ratio of 18 wt.%, and a methanol to oil molar ratio of 12:1. The properties of produced biodiesel complied with the ASTM specifications. The catalytic stability test showed that 35KOH/ZSM5 was stable for 3 consecutive runs. Characterization of the spent catalyst indicated that a slight deactivation might be due to the leaching of potassium oxides active sites.