Biosurfactants are one of the microbial bioproducts that are in most demand from microbial-enhanced oil recovery (MEOR). The production of biosurfactant is still a relatively high cost. Therefore, this study aims to reduce production costs by utilizing palm oil mill effluent (POME) as the main carbon source. This work examines the optimal conditions of biosurfactant production by Halomonas meridiana BK-AB4 isolated from the Bledug Kuwu mud volcano in Central Java Indonesia and studies it for EOR applications. The biosurfactant production stage was optimized by varying POME concentration, incubation time, NaCl concentration, and pH to obtain the maximum oil displacement area (ODA) values. A response surface methodology (RSM) and a central composite design (CCD) were used to identify the influence of each variable and to trace the relationship between variables. Optimum biosurfactant production was found at a POME concentration (v/v) of 16%, incubation (h) of 112, NaCl concentration (w/v) of 4.7%, pH of 6.5, with an oil displacement area of 3.642 cm. The LC-MS and FTIR analysis revealed the functional groups of carboxylic acid or esters, which indicated that the biosurfactant produced belonged to the fatty acid class. The lowest IFT value was obtained at the second and seventh-day observations at a concentration of 500 mg/L, i.e., 0.03 mN/m and 0.06 mN/m. The critical micelle concentration (CMC) of biosurfactant was about 350 mg/L with a surface tension value of about 54.16 mN/m. The highest emulsification activity (E24 = 76%) in light crude oil (naphthenic−naphthenic) and could reduce the interfacial tension between oil and water up to 0.18 mN/m. The imbibition experiment with biosurfactant results in 23.89% additional oil recovery for 60 h of observation, with the highest increase in oil recovery occurring at the 18th hour, which is 2.72%. Therefore, this bacterium and its biosurfactant show potential, and the bacterium are suitable for use in MEOR applications.