The need to attain a good oil extraction rate and hence reduce oil loss is very important in palm oil industry. Some of the oil loss is encountered at the digestion process and ultrasound has been proposed as an alternative method to assist better oil recovery at this step of milling process. Hence, this work investigates the effect of ultrasound on crude palm oil (CPO) quality when mixed with various amount of water. A combined level of ultrasound amplitude (0 - 90 %), treatment time (5 - 30 min) and heat treatment (30 – 100 oC) were selected. Two sets of different initial qualities of CPO were studied. The initial free fatty acids (FFA) were 3.1 % and 4.5 % with deterioration of bleachability index (DOBI) value of 2.8 and 2.7 respectively. It was found that FFA quality did not show any significant changes on the treatment conditions, however, a slight deterioration of DOBI value was observed when the oil-in-water content decreased. It was also found that addition of water (as hot water or live steam) in the milling process has caused undesirable emulsification due to mechanical agitation. Applying ultrasound to oil/water mixtures promote formation of emulsion due to acoustic cavitation and high interfacial shear forces.