Coconut oil is a rich source of beneficial medium chain fatty acids (MCFAs) particularly lauric acid. In this study, the oil was modified into a value-added product using direct modification of substrate through fermentation (DIMOSFER) method. A coconut-based and coconut-oil-added solid-state cultivation using a Malaysian lipolytic Geotrichum candidum was used to convert the coconut oil into MCFAs-rich oil. Chemical characteristics of the modified coconut oils (MCOs) considering total medium chain glyceride esters were compared to those of the normal coconut oil using ELSD-RP-HPLC. Optimum amount of coconut oil hydrolysis was achieved at 29% moisture content and 10.14% oil content after 9 days of incubation, where the quantitative amounts of the modified coconut oil and MCFA were 0.330 mL/g of solid media (76.5% bioconversion) and 0.175 mL/g of solid media (53% of the MCO), respectively. MCOs demonstrated improved antibacterial activity mostly due to the presence of free lauric acid. The highest MCFAs-rich coconut oil revealed as much as 90% and 80% antibacterial activities against Staphylococcus aureus and Escherichia coli, respectively. The results of the study showed that DIMOSFER by a local lipolytic G. candidum can be used to produce MCFAs as natural, effective, and safe antimicrobial agent. The produced MCOs and MCFAs could be further applied in food and pharmaceutical industries.