A supported immobilized lipase was investigated as a suitable biocatalyst for the transesterification of triolein to methyl oleate in a packed bed reactor (PBR). The packing material for the bioreactor was comprised of lipase immobilized in sol gel and supported on Celite (CSG). A kinetic- and mass transfer-based model was developed, incorporating a novel efficiency correlation to account for the effect of glycerol on the immobilized enzyme. Comparing the CSG PBR performance to that using a commercial lipase preparation (Novozym 435 (N435)), higher product conversion was achievable using CSG over a shorter time period, indicating the superior performance of CSG for enzymatic transesterification. A rate equation accounting for alcohol inhibition was used to compare the kinetics of the CSG and N435 PBRs. It was found that CSG exhibited a higher maximum reaction rate and was less prone to inhibition by methanol relative to N435. The resulting model showed good agreement with the experimental data, and CSG exhibited good stability without loss of activity over a five day period. This biocatalyst shows significant potential for the efficient production of biodiesel, and the mechanistic model developed has broader applications for similar enzyme and reaction systems.