Biodiesel has attracted considerable attention as an alternative fuel during the past decades. The main hurdle to the commercialization of biodiesel is the cost of the raw material. Use of an inexpensive raw material such as rice bran oil is an attractive option to lower the cost of biodiesel. Two commercially available immobilized lipases, Novozym 435 and IM 60, were employed as catalyst for the reaction of rice bran oil and methanol. Novozym. 435 was found to be more effective in catalyzing the methanolysis of rice bran oil. Methanolysis of refined rice bran oil and fatty acids (derived from rice bran oil) catalyzed by Novozym 43 S (5% based on oil weight) can reach a conversion of over 98% in 6 h and I h, respectively. Methanolysis of rice bran oil with a free fatty acid content higher than 18% resulted in lower conversions (< 681%). A two-step lipase-catalyzed methanolysis of rice bran oil was developed for the efficient conversion of both free fatty acid and acylglycerides into fatty acid methyl ester. More than 98% conversion can be obtained in 4-6 h depending on the relative proportion of free fatty acid and acylglycerides in the rice bran oil. Inactivation of lipase by phospholipids and other minor components was observed during the methanolysis of crude rice bran oil. Simultaneous dewaxing/degumming proved to be efficient in removing phospholipids and other minor components that inhibit lipase activity from crude rice bran oil. (C) 2005 Society of Chemical Industry.