Photobacterium lipolyticum M37 lipase (Lip(M37)) was immobilized on the surface of intracellular polyhydroxybutyrate (PHB) granules in Escherichia coli. Lip(M37) was genetically fused to Cupriavidus necator PHA synthase (PhaC (Cn) ), and the engineered PHB operon containing the lip (M37) -phaC (Cn) successfully mediated the accumulation of PHB granules (85 wt.%) inside E. coli cells. The PHB granules were isolated from the crude cell extract, and the immobilized Lip(M37) was comparable with the free form of Lip(M37) except for a favorable increase in thermostability. The immobilized Lip(M37) was used to synthesize oleic acid methyl ester (biodiesel) and oleic acid dodecyl ester (wax ester), and yielded 98.0 % conversion in esterification of oleic acid and dodecanol. It was suggested that the Lip(M37)-PhaC(Cn) fusion protein successfully exhibited bifunctional activities in E. coli and that in situ immobilization of lipase to the intracellular PHB could be a promising approach for expanding the biocatalytic toolbox for industrial chemical synthesis.