We have found that most commercially available biodegradable hydraulic oils show low static friction coefficients not depending on the kinds of wet friction materials. Since hydraulic motors of a hydraulic excavator contain wet parking brakes, the most commercially available biodegradable hydraulic oils can not provide enough brake torque capacity to park safely. Furthermore, all kinds of commercially available biodegradable hydraulic oils do not have adequate oil performance for a hydraulic system of construction eq ipment. Thus we have developed a n high performance biodegradable hydraulic oil. To obtain a high static friction coefficient and compatibility with elastomers, a new synthetic ester base fluid has been developed. To improve oxidation stability and to attain compatibility with mineral oil based hydraulic oils,. an additive formulation has also been developed. After evaluating friction characteristics and oxidation stability, we selected the best candidate oil and conducted a high pressure axial piston pump bench test. Furthermore, we confirmed biodegradability and toxicity of this candidate oil.