Oil palm is widely grown in Malaysia. Palm oil has attracted the attention of researchers to develop an 'environmentally friendly' and high quality fuel, free of nitrogen and sulfur. In the present study, the catalytic cracking of palm oil to biofuel was studied over REY catalyst in a transport riser reactor at atmospheric pressure. The effect of reaction temperature (400-500 degrees C), catalyst/palm oil ratio (5-10) and residence time (10-30s) was studied over the yield of bio-gasoline and gas as fuel. Design of experiments was used to study the effect of operating variables over conversion of palm oil and yield of hydrocarbon fuel. The response surface methodology was used to determine the optimum value of the operating variables for maximum yield of bio-gasoline fraction in the liquid product obtained.