Economical and environmentally safe bio-oils are gaining market value as a processing aid for elastomer compounds. Unsaturated triglycerides of bio-oils can be easily modified in various ways, like epoxidation, esterification, and so on. In the present work, 15-mole percentage epoxidized neem oil (ENO) was synthesized by an acetic acid-hydrogen peroxide system. Neem oil (NO) and ENO were characterized by nuclear magnetic resonance spectroscopy, Fourier transform infrared spectroscopy and differential scanning calorimetry. For the first time, the effect of ENO on the curing, mechanical, and thermal properties of nonpolar styrene-butadiene rubber (SBR) and polar nitrile rubber (NBR) were studied. Tear strength, abrasion resistance and hardness of the SBR/ENO compound were comparable to the SBR/ TDAE (total distillate aromatic extract) compound. NBR/ENO compound exhibited improved tensile strength and abrasion resistance than the NBR/dioctyl phthalate (DOP) compound. Comparable tear strength and hardness were obtained for NBR/ENO and NBR/DOP compounds. Hence, ENO can be used as a sustainable and cost-effective alternative of the TDAE and DOP process oils.