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We systematically studied the preparation method of magnesium oxide as cheap heterogeneous basic catalysts, and found a very simple method to obtain MgO with high surface area and high catalytic activity. Furthermore, the structure of MgO was characterized using many techniques, such as BET, TGA, XRD and SEM. The relationship of catalytic activity and structure of MgO has been investigated in detail. At last, the obtained MgO was used in the liquid phase reactions, including Meerwein-Pondorf-Verley reaction, Michael addition, Knoevenagel condensation, transesterification of vegetable oil to biodiesel and synthesis of P-Keto 1,3-dithianes. The prepared magnesium oxide catalyst was used in the liquid phase Meerwein-Pondorf-Verley reaction of benzaldehyde with alcohol. Effect of preparation method on the catalytic activity and structure of MgO has been investigated in detail. The experimental result showed that the optimal calcination temperature was 450 °C. Lithium supported magnesium oxide was also studied. Magnesium oxide obtained using a novel but simple procedure was systematically investigated as a heterogeneous base catalyst for the Michael addition and Knoevenagel condensation. The activity of MgO was studied in detail, together with the effects of solvent and of substrate on the catalytic activity for each type of reaction. A key finding is that the formation of enols affected the activity of MgO. The preparation method and activity of MgO was determined and compared with CaO. MgO was used for the first time as a heterogeneous basic catalyst to synthesis P-keto-1,3-dithianes from conjugated ynones and ynoates. It was found that MgO is an active catalyst with activity better than or comparable with previously identified homogeneous or heterogeneous catalysts for this reaction. The effect of preparation methods on the activity of MgO is described. Transesterification of vegetable oil to biodiesel with MgO as catalyst was studied at 60 °C and 200 °C, respectively. Effect of methanol-to-oil molar ratio, catalyst loading, reaction temperature and calcination temperature was investigated. 90% yield can be obtained at 60 °C for 3h, and 80% at 200 °C for 15min. The results showed that the prepared MgO was active for the synthesis of biodiesel.