Catalytically active lipase was synthesized using Escherichia coli S30 extract from the signal-deleted lipL gene (rlipL) in the presence of its N-terminal hydrophobic fragment-truncated modulator (rLimL) that was purified from the overexpressing E. coli cells. The specific activity of the lipase thus synthesized was 125 times higher than that of the purified one from Pseudomonas sp. 109. No lipase activity was detected in the absence of rLimL, even though the lipase protein itself was synthesized. Active lipase was also produced in vitro by coexpression of rlipL and the modulator gene (rlimL), although a much smaller amount of the lipase was formed. In the absence of rLimL, aggregates of the lipase were formed during its folding process. The addition of rLimL proportionally raised both lipase solubility and enzyme activity. An unstable but high activity peak of the lipase was found during its folding process.