Commercial lipases were tested for the ability to hydrolyze palm olein in isooctane in a two-phase system. Lipase OF (from Candida rugosa) showed the highest specific activity of 209 U/mg protein where 1 U is the amount of lipase enzyme required to produce 1 µmol of fatty acid (as palmitic acid) per minute. The enzyme was adsorbed completely on Accurel EP100 (particle size <200 µm) with 20.5% activity retained. The soluble and the immobilized lipase OF showed optimal activity at the same pH and temperature (pH 6.5-7.5 and 35°C). However, the immobilized lipase had a wider range of pH and higher temperature stability. Continuous hydrolysis of palm olein was performed in a packed-bed reactor with 656 U of immobilized enzyme. The substrate (20% palm olein in isooctane) and Tris/maleate buffer were fed concurrently at the flow rates of 0.08 and 0.04 mL/min, respectively. The system gave a degree of hydrolysis (DH) of 90-100% for up to 250 h. A more stable system allowing for more than 300 h operation at DH > 95% was achieved by mixing the immobilized enzyme with 1000-1500 µm Accurel EP100 to increase the system porosity and continuous feeding of the aqueous phase recycling from the product mixture. A similar result was also obtained using 1007 U of the immobilized enzyme and 60% palm olein in isooctane fed at 0.06 mL/min.