A new process for enzymatic synthesis of biodiesel at high water content (10-20%) with 96% conversion by lipase from Candida sp. 99-125 was studied. The lipase, a no-position-specific lipase, was immobilized by a cheap cotton membrane and the membrane-immobilized lipase could be used at least six times with high conversion. The immobilized lipase could be used for different oil conversion and preferred unsaturated fatty acids such as oleic acid to saturated fatty acids such as palmitic acid. The changes in concentration of fatty acids, diglycerides, and methyl esters in the reaction were studied and a mechanism of synthesis of biodiesel was suggested: the triglycerides are first enzymatically hydrolyzed into fatty acids, and then these fatty acids are further converted into methyl esters.