Crude palm oil (CPO) was physically refined in a 200-kg batch pilot refining plant. A study of the possible role of degumming and bleaching steps in the refining process for a possible critical role in the formation of 3-chloropropane-1,2-diol (3-MCPD) esters was evaluated. For the degumming step, different percentages of phosphoric acid (0.02–0.1%) as well as water degumming (2.0%) were carried out. Six different types of bleaching clays, mainly natural and acid activated clays were used for bleaching process at a fixed dose of 1.0%. Deodorization of the bleached oils was performed at 260 °C for 90 min. Analyses showed that 3-MCPD esters were not detected in the CPO. Phosphoric acid degumming (0.1%) in combination with acid activated clays produced the highest levels (3.89 ppm) of 3-MCPD esters in the refined (RBD) oil. The esters were at the lowest levels (0.25 ppm) when the oil was water degummed and bleached with natural bleaching clays. However, the refined oil qualities were slightly compromised. Good correlation of 0.9759 and 0.9351 was obtained when concentration of the esters was plotted against acidity of the bleaching earths for the respective acid and water degumming processes. The findings revealed the contribution of acidic conditions on the higher formation of 3-MCPD esters. In order to lower the esters formation, it is important to reduce acid dosage based on the crude oil qualities or to find alternatives to acid degumming process. Neutralization of the acidity prior to deodorization was effective in reducing the formation of 3-MCPD esters.