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The spent bleaching clays (SBC) of vegetable oil refining plants have residual vegetable oil contents ranging from 17 to 40 wt%. The common worldwide practice of landfilling such spent clays imposes inevitable environmental hazards. The extraction of oil from a spent clay will not only alleviate this problem, but can also provide an oil source for processes, such as transesterification for the production of alcohol-esters. In-situ transesterification of the residual oil within SBC is an even more attractive idea, as it can eliminate the extraction step from the process. In this study, in-situ transesterification on the spent bleaching clay of a local vegetable oil plant was investigated experimentally. Furthermore, optimum operating conditions were determined for a number of parameters influencing the conversions, including reaction temperature, ethanol-to-SBC ratio, alkali catalyst type, and catalyst-to-SBC mass ratio. The experiments were designed by the response surface method based on the central composite approach (RSM-CCD model). The results were analyzed using the analysis of variance method (ANOVA) to investigate the effect of the parameters on the efficiencies of the biodiesel produced and the oil removed from the initial SBC. Within the ranges investigated, the maximum conversion to ethyl-ester was 72.90% at the optimum conditions of a reaction temperature of 73.2 °C, reaction time of 4.5 h, ethanol/SBC ratio of 4.2 ml/g, while using NaOH alkali catalyst with a catalyst-to-SBC mass ratio of 4.33%.