The compatibility of palm oil, its fractions and their blends corresponding with butter oil was investigated for some physical and chemical properties. The results revealed that most of the studied parameters showed significant differences between palm oil products and butter oil. The fractions and blends showed great differences in their physical and chemical properties from those of the original palm oil. The colour of palm oil and its fractions or their blends ranged from light yellow to golden yellow, while the colour butter oil was reddish yellow. Density values of palm oil and its derivatives were significantly lower than the density of butter oil. Different fats showed statistically significant differences in their melting points. The melting point of PO was close to the melting point of BO. However, POo showed the lowest melting point and POs showed the highest melting point, while PO blends showed intermediate melting points. Free fatty acids (FFA%) and peroxide values (PVs) of palm oil and its fractions were significantly lower than those specified by the Malaysian standards, demonstrating good oxidative stability, excellent quality and long shelf life. The varied properties of palm oil products make them a good choice for replacement of butter oil. Therefore, the utilization of these modified products provides other functional benefits in a wide variety of food systems.