Encapsulation is one of the immobilization methods to increase the stability of the enzyme or other biomolecules by binding or trapping the molecules in a certain matrix. Silica gel was mostly chosen as a matrix to encapsulate the enzyme due to its high thermal stability. In this research, silica gel was used to encapsulate of lipase enzyme. Silica gel was synthesized from sodium silicate by the sol-gel technique. Silica from rice husk ash was extracted using 2 M NaOH to produce a sodium silicate solution. The silica gel was synthesized using the acidification of sodium silicate solution. The various mass and volume ratios of the enzyme and sodium silicate solution were 1:1; 1:2, and 2:1 (w/v). The amount of encapsulated enzyme was analyzed with UV-Vis spectrophotometry at a wavelength of 540 nm after complexing with biuret. The encapsulated enzyme activity test was carried out for the transesterification reaction of palm oil under various conditions. Fatty Acid Methyl Esther (FAME) analysis and surface analysis of the encapsulated enzyme was performed using GC-MS and SEM-EDX, respectively. The results showed that the lipase enzyme could be well encapsulated in silica gel after aging for eight days, at a lipase and sodium silicate ratio of 1:2 (w/v) with a percentage of 93.72%, and there were still 85.76% encapsulated lipase even after being washed seven times. The transesterification reaction resulted in the highest conversion of oil to FAME (33.87%) at a mole ratio of 1:3 oil: methanol and a lipase mass of 0.5 g.