AbstractAn extracellular lipase from the fungusPythium ultimum was active in an invert [water‐in‐oil] emulsion consisting of 4% water emulsified into edible oils with taurocholic acid as the surfactant. The pH range for optimum lipolytic activity was 7.5–8.5, and the optimum temperature for activity was 45°C. Specific activity of the purified lipase was 919.5 µmol/min/mg protein in the invert emulsion. Water content of the invert emulsion influenced activity of the lipase differently, depending on the substrate. The rate of olive oil hydrolysis with thePythium lipase decreased with time, possibly due to inactivation of the enzyme and inhibition by free fatty acid products of the reaction. Total hydrolysis of olive oil by thePythium lipase was compared with that by lipases fromCandida rugosa andRhizopus arrhizus in the invert emulsion. Hydrolysis essentially ceased within 24 h or less for the lipases from each source. However, the addition of aqueous solution at 8 h from the beginning of incubation stimulated hydrolysis byC. rugosa andR. arrhizus lipases by 1.8‐fold and 2.5‐fold, respectively, but not by theP. ultimum lipase, over corresponding controls after 48 h.