Palm-based polyols were synthesised via an alcoholysis process using K10 montmorillonite catalyst. The alcoholysis process was carried out by using epoxidised palm olein and isobutanol. The catalysing ability of K10 montmorillonite catalyst during alcoholysis process was investigated. The process factors affecting alcoholysis, such as reaction temperature and reaction time, were studied. The optimum reaction conditions discovered of 60°C for 2 hr of reaction time were defined for production of palm-based polyol with optimised hydroxyl value, that is, 124.71 mg KOH g^-1 of sample. Based on the study, K10 montmorillonite catalyst was able to catalyse the alcoholysis process to produce palm-based polyol with a low acid value, low viscosity, low average molecular weight distribution and low functionality which is suitable to be used as a component in coating applications.