Nanolubricant, which is the suspension of nanoparticles in a based lubricant, promises a positive impact on tribological performance. However, its stability is a cause for concern in actual applications. The present research evaluates the effect of dispersion methods on the dispersion stability of graphite in palm oil-based lubricant. Nanolubricants are prepared by different two- step methods; including magnetic stirrer, overhead stirrer and high-shear homogeniser. The dispersion stability of nanolubricants was measured by sedimentation photographs and metallographic microscopy. The results indicate that the high-shear homogeniser method was the most effective at providing a more stable suspension. Dispersion stability of nanolubricants affects the viscosity and tribological performance.