Current study presents RSM based optimized production of biodiesel from palm oil using chemical and enzymatic transesterification. The emission behavior of biodiesel and its blends, namely, POB-5, POB-20, POB-40, POB-50, POB-80, and POB-100 was examined using diesel engine (equipped with tube well). Optimized palm oil fatty acid methyl esters (POFAMEs) yields were depicted to be47.6±1.5, 92.7±2.5, and95.4±2.0% for chemical transesterification catalyzed by NaOH, KOH, and NaOCH3, respectively, whereas for enzymatic transesterification reactions catalyzed by NOVOZYME-435 and A. n. lipase optimized biodiesel yields were94.2±3.1and62.8±2.4%, respectively. Distinct decrease in particulate matter (PM) and carbon monoxide (CO) levels was experienced in exhaust emissions from engine operating on biodiesel blends POB-5, POB-20, POB-40, POB-50, POB-80, and POB-100 comparative to conventional petroleum diesel. Percentage change in CO and PM emissions for different biodiesel blends ranged from −2.1 to −68.7% and −6.2 to −58.4%, respectively, relative to conventional diesel, whereas an irregular trend was observed for NOx emissions. Only POB-5 and POB-20 showed notable reductions, whereas all other blends (POB-40 to POB-100) showed slight increase in NOx emission levels from 2.6 to 5.5% comparative to petroleum diesel.