Pseudomonas pseudomallei 12Sm produced an extracellular lipase during growth on n-hexadecane as the sole carbon source. Sephadex G-150 filtration and native PAGE analyses of the ammonium sulphate (60%, w/v) precipitated protein of the cell-free culture broth showed the molecular mass (M,) of the lipase protein to be about 143 kDa. The lipase was stable at high alkaline pH and the optimum activity was at pH 10. Using a simple entrapment technique, the lipase was immobilised in a polyvinyl alcohol (PVA) membrane (PAM) and was applied in the synthesis of isoamyl acetate by transesterification reaction. The stability of the immobilised lipase in organic solvents was much higher than the native lipase, particularly in the poalrity (log P) range of 0.23-0.85. The relative activity of the PAM-immobilised lipase was significantly higher than the native or celite-immobilised lipase in the temperature range of 35-50degreesC. The retention of activity of the PAM-immobilised lipase at room temperature for 3 months was 62 and 70% higher than the free and celite-immobilised lipase, respectively. The apparent Michaelis-Menten constants (K-m) for immobilised and free lipase were 555 and 178 muM, respectively. The catalytic efficiency of the lipase (K-cat) did not significantly altered upon immobilisation in the PAM. Water at a concentration of 0.2% in the reaction mixture increased the activity of the immobilised lipase upto 4.3-fold and this was sustained upto the fifth reaction cycle.