Fossil fuel reduction and environmental degradations are the two crises that the world threatened by generally and UAE specifically. Biodiesel is a fuel produced through a chemical reaction of animal fat or vegetable oil with alcohol, and consider a potential alternative of diesel engines. However, this reaction needs a catalyst to complete successfully. The current article contains transesterification of neem oil with KOH catalyst supported with activated carbon (KOH/AC). This study included experimental work by applying KOH/AC as an effective catalyst for transesterification of local neem oil. The response surface methodology (RSM) software tool was used in this study to determine the optimal conditions of reaction time, amount of catalyst and ratio of methanol to oil in order to obtain the highest percentage of biodiesel product. The optimal settings obtained were 60 min reaction time, a ratio of oil to methanol 1:6 and 1 wt% of catalyst, which lead to the highest yield of biodiesel (100 wt%). The specific features of biodiesel were checked and compared to ASTM standards.