High functionality tall oil based polyols were synthesized by oxirane ring-opening reaction and subsequent esterification reaction of epoxidized tall oil fatty acids. Four different reagents were used for the polyol synthesis: diethanolamine (DEOA); triethanolamine (TE-OA); trimethylolpropane (TMP) and diethylene glycol (DEG). Developed high functionality tall oil based polyols were characterized by hydroxyl value, acid value, viscosity, density and moisture content. Furthermore, UPLC analysis was performed to determine average molar mass and polydispersity of obtained polyols. The chemical structure of obtained polyols was confirmed by MALDI TOF and FTIR analysis. Synthesized high functionality polyols were used to develop rigid PU foam thermal insulation material. In the foam formulation, only bio-based polyols were used. To reduce the viscosity of the overall formulation another bio-based polyol, which is obtained in the esterification reaction of tall oil and TEOA was used. Response surface modelling was used to optimize bio-based polyol and blowing agent (c-pentane) content to achieve rigid PU foams with an apparent density of 40 kg/m3, closed-cell content above 90% and as high as possible renewable material content. The bio-based polyol content and c-pentane blowing agent influence of the apparent density, closed-cell content, start time, string time, tack-free time and crosslink density was modelled using Design-Expert software. Furthermore, the thermal conductivity, as well as compression strength, was analyzed for the developed rigid PU foams to access their viability as thermal insulation material.