The natural habitat of the oil palm comprises very wet and relatively dry niches in the lowland rain forest in West and Central Africa. The domestication of the oil palm started with the extraction of fruits from wild forest resources. When forests were cleared for shifting cultivation, oil palms were not felled and in the subsequent regeneration period they obtained a favourable position resulting in semi-wild palm groves. Thinning of groves gave rise to semi-permanent or permanent intercropping systems of palms and food crops. After the transfer of oil palm to SE Asia in the 19th century, a mono-crop oil palm evolved. Its success was based on a favourable climate, breeding, improved cultivation and processing practices and the absence of major pests and diseases. The high-yielding production systems are sustainable at high input levels and pollution can be kept within acceptable limits. Oil yields and production costs compare favourably to those from other oil crops. The domestication of oil palm for oil yield so far can be considered as a success story. Physiological studies indicate that there is still considerable scope for further increase in yield. The adaptation of oil palm to new environments will continue and produce diversification puts new demands on domestication. This paper reviews the different stages in the domestication process especially adaptation to plantation agriculture, the simultaneous genetic improvement, and the prospects of reaching full yield potential in different environments.