Mycelium-bound lipase (MBL) was prepared using a strain of Geotrichum candidum isolated from local soil. At the time of maximum lipase activity (54 h), the mycelia to which the lipase was bound were harvested by filtration and centrifugation. Dry MBL was prepared by lyophilizing the mycelia obtained. The yield of MBL was 3.66 g/l with a protein content of 44.11 mg/g. The lipase activity and specific lipase activity were 22.59 and 510 U/g protein, respectively. The moisture content of the MBL was 3.85%. The activity of free (extracellular) lipase in the culture supernatant (after removal of mycelia) was less than 0.2 U/ml. The MBL showed selectivity for oleic acid over palmitic acid during hydrolysis of palm olein, indicating that the lipase from G. candidum displayed high substrate selectivity for unsaturated fatty acid containing a cis-9 double bond, even in crude form. This unique specificity of MBL could be a direct, simple and inexpensive way in the fats and oil industry for the selective hydrolysis or transesterification of cis-9 fatty acid residues in natural triacylglycerols.