Rhizopus arrhizus lipase (EC 3.1.1.3; triacylglycerol hydrolase) was used in this study to investigate the hydrolysis of palm kernel olein in AOT-isooctane-water reversed micelle system at W-0 = 13, pH = 7, and T = 30 degrees C. The hydrolytic reaction obeys Michaelis-Menten kinetics for substrate concentrations in the range (0.175 and 0.877M). The apparent K-m and V-max for the substrate were 0.397M (equivalent to 9.06% w/v) and 5523 U/mg protein, respectively. Product inhibition with a dissociation constant of the enzyme-product complex, K-I = 9.74 mM, was confirmed. Experimental results from the change of product concentrations with respect to time correlated sufficiently with those predicted theoretically from the rate equation for a reaction time up to 100 min. However, the discrepancy between the observed results and the predicted ones would increase with reaction time. Possible reasons for this deviation were discussed.