T h e ability of extracellular microbial lipases t o remain catalytically active in predominantly organic reaction sys(ems containing vcry small amounts o f water is now well known. Under these conditions the enzymes can be used as effective catalysts for ii wide range o f esterification and transestcrificntion reactions. high yields o f cster products being obtained because the normal hydrolytic action o f the lipases is restricted by the limitcd availability of water. This paper discusses the use o f these reactions for the synthesis of fatty acid esters and the production of modified triacylglycerols. At present these substances are produced by the oleochemical and edible fat industries by chemical esterificntion. interesterification and hydrogenation processes. T h e potential advantages o f using enzyme technology cithcr in placc of o r in addition t o chemical procedures arc found in the specificity of enzyme catalysis and the mild reaction conditions under which enzymic processes are operated. Lipasecatnlyscd reactions can be run without the generation o f byproducts :associated with usc o f more severe chemical procedures. giving improved product yields and/or better product quality. T h e specificities of lipases, particularly their regioand stereo-specificities, can be exploited t o generate products which are difficult t o obtain by chemical procedures. T h e fatty acid esters and modified triacylglycerols targeted by the oleochemical and edible fat industries for possible production by enzymic procedures have values in the range L I I O/kg with production rates varying from 500 to 50 000 tonnes/annum. They iare not high-value, lowtonnage products. For this reason, successful production o f these materials using cnr.yme technology rcquires the development o f highly productive, efficient catalysts and reactor systems.