Palm oil production is one of the major industries in Malaysia and this country ranks one of the largest productions in the world. In Malaysia, the total production of crude palm oil in 2008 was 17,734,441 tonnes. However, the production of this amount of crude palm oil results in even larger amounts of palm oil mill effluent (POME). In the year 2008 alone, at least 44 million tonnes of POME was generated in Malaysia. Currently, the ponding system is the most common treatment method for POME but other processes such as aerobic and anaerobic digestion, physicochemical treatment and membrane filtration may also provide the palm oil industries with possible insights into the improvement of POME treatment processes. Generally, open ponding offers low capital and operating costs but this conventional method is becoming less attractive because the methane produced is wasted to the atmosphere and the system can not be certified for Carbon Emission Reduction trading. On the other hand, anaerobic digestion of POME provides the fastest payback of investment because the treatment enables biogas recovery for heat generation and treated effluent for land application. Lastly, it is proposed herewith that wastewater management based on the promotion of cleaner production and environmentally sound biotechnologies should be prioritized and included as a part of the POME management in Malaysia for attaining sustainable development. This paper thus discusses and compares state-of-the-art POME treatment methods as well as their individual performances. Copyright 2010 Elsevier Ltd. All rights reserved.