A magnetic composite poly(styrene-methacrylic acid) microsphere, was prepared using oleic acid-coated magnetic nanoparticles as seeds by microemulsion copolymerization of styrene (St) and methacrylic acid (MAA). The lipase from Candida rugosa was then covalently bound to the magnetic polymer-coated microspheres by using 1-ethyl-3-(3-(dimethylamino)propyl)carbodiimide hydrochloride (EDAC) as an activation reagent. The immobilization of lipase could enhance the thermal and pH stability of lipase activity when compared to free lipase. The immobilized lipase microspheres were characterized by lipase activity assays, Fourier transform infrared spectroscopy, powder X-ray diffraction, transmission electron microscopy, and vibrating-sample magnetometer techniques. The bound lipase showed high activities to soybean oil transesterification with methanol to produce biodiesel. It was found that the oil conversion of 86% was attained at a reaction temperature of 35 degrees C for 24 h. The immobilized lipase is stable with repeated use for four cycles without severe loss of its activity.