Lipase Saiken 100 (Rhizopus japonicus) and its immobilized form displayed very poor activity (hydrolysis and interesterification) in microaqueous n-hexane solutions. Enzyme modification by the addition of stearic acid or sorbitan monostearate significantly improved activity. A ceramic carrier (SM-10) was used to immobilize modified lipase Saiken (stearic acid, sorbitan monostearate, and lecithin) and was found to further enhance hydrolysis and interesterification rates in n-hexane. In addition, the biocatalysts were re-used for four consecutive batch reactions with no significant shortfall in activity. Reaction rates were also greatly affected by the total reaction water content. Careful control of the biocatalyst water content prior to use and additional reaction water were required to optimize activity and minimize hydrolytic diglyceride byproducts. Hydrolysis and interesterification reaction rates were favored with immobilized biocatalyst water contents of 6.25 and 0.43 wt% with additional reaction water contents of 600 and 20 mg/L, respectively. JAOCS 75, 1519-1526 (1998).