|| Malaysia is the largest producer and exporter of palm oil. Palm oil processing is carried out in palm oil mills where oil is extracted from a palm oil fruit bunch. Large quantities of water are used during the extraction of crude palm oil from the fresh fruit bunch, and about 50% of the water results in palm oil mill effluent (POME). POME is a thick brownish liquid that contains high amounts of total solids (40,500 mg/L), oil and grease (4000 mg/L), COD(50,000 mg/L) and BOD (25,000 mg/L). The disposal of this highly polluting effluent is becoming a major problem if it is not being treated properly besides a stringent standard limit imposed by The Malaysian Department of Environment for effluent discharged. A POME treatment system based on membrane technology shows high potential for eliminating the environmental problem, and in addition, this alternative treatment system offers water recycling.The treated effluent has a high quality and crystal clear water that can be used as the boiler feed water or as the source of drinking water production. In our current research, a pilot plant was designed and constructed for POME treatment;two stages of treatment have been conducted whereby coagulation, sedimentation and adsorption play their roles at the first stage as a membrane pretreatment process, and ultrafiltration and reverse osmosis membranes are combined for the membrane separation treatment. Results from the total treatment system show a reduction in turbidity, COD and BOD up to 100%, 98.8% and 99.4%, respectively, with a final pH of 7. Thus, the results show that this treatment system has a high potential for producing boiler feed water that can be recycled back to the plant.