Zeolite ZSM-5 prepared from rice husk ash has been successfully synthesized and studied as a catalyst in transesterification of vegetable oil for production of biodiesel FAME (Fatty Acid Methyl Ester). Zeolite ZSM-5 was prepared via hydrothermal method by using sea water as solvent at 170oC for 48 hours. The catalytic activity of zeolite ZSM-5 was studied in different concentration of zeolite ZSM-5, reaction time and mechanical stirring. Characterization of zeolite ZSM-5 was performed by Fourier Transform Infra Red (FT-IR), X-Ray Diffraction (XRD), Scanning Electron Microscopy (SEM) combined with EDX and biodiesel FAME was analysed both qualitative and quantitative by using GC-MS (Gas Chromatography-Mass Spectrophotometer). The result showed that 0.5% b/b of zeolite ZSM-5 produced the maximum biodiesel FAME yield of 92.75% by using methanol/oil : 3/1 at 60oC for 5 hours and 300 rpm in transesterification reaction.