The esterification and hydrolytic activities of free and immobilized Candida rugosa lipase isoform 1 (LIP1) were investigated. Esterification activity was determined by reacting caprylic acid with glycerol in the presence of molecular sieves (30%, w/w), and the volume of 1.0 M NaOH consumed by the reaction products upon titration was used to calculate esterification activity. Caprylic acid was also reacted with cottonseed oil, and the amount of caprylic acid incorporated after 12 h of reaction was determined. Results indicated that LIP1 had little esterification activity, which was not significantly improved upon immobilization. Hydrolytic activity was determined by incubating tricaprylin emulsion (15%, w/w) with the respective lipases for 60 min, and the reaction products were titrated against 0.5 M NaOH. LIP1 showed hydrolytic activity comparable to Lipozyme RM IM. The hydrolytic activity improved significantly upon immobilization. Immobilization on Celite 545 produced the highest increase in hydrolytic activity.