Lubrication properties of sunflower oil have been modified by epoxidation in the first step and acetylation of the obtained epoxide in the second step. Epoxidation has been followed in dichloromethane solution in the presence of hydrogen peroxide and acetic acid as oxidizing agent and sulfuric acid as catalyst. The reaction has been monitored and optimized by measurement of iodine value, epoxy content, and recording the FTIR spectrum at different experimental conditions. Acetylation has been performed by enduring the optimized conditions of epoxidation reaction, in the presence of boron trioxide as catalyst and at elevated temperature. The recent reaction has been monitored and optimized by measurement of hydroxyl value, epoxy content, and recording the FTIR spectrum at different experimental conditions. The final product of both,epoxidation and acetylation reactions has been confirmed by FTIR and NMR data. Relative to sunflower oil, pour point and oxidation stability of the modified oil has considerably been improved. The modified oil has successfully been employed in the formulation of industrial gear oil. The investigation on the possibility of the additive application of the modified oil, as well as its miscibility with additives was considered.