A novel form of lipase covalently 'immobilized' on reversibly soluble polymers is proposed as a reusable form of enzyme that is free from steric and diffusion limitations associated with enzymes immobilized on porous solid supports. Lipase (from Novo Nordisk's Lipolase 100T) was conjugated onto two water soluble polymers viz. Eudragit S 100, a copolymer of methylmethacrylate and methacrylic acid from Rohm GmbH; and carboxymethyl cellulose (CMC), a readily available semi-synthetic polymer. Lipase 'immobilized' on Eudragit (E-lipase) exhibited reversible solubility in water, and was insoluble below pH 5.0 and soluble above pH 5.5. CMC-lipase could be reversibly precipitated from aqueous solutions using combination of 7% w/w polyethylene glycol-4000 and 50 mM Ca2+. The prepared E-lipase could completely hydrolyze 20% w/v olive oil in isooctane at similar to35degreesC, at an enzyme concentration of 12.5 U/ml, and an organic:aqueous phase ratio of one. The enzyme preparation was stable under stirred conditions, and could be reused multiple times without loss of enzyme activity. It was found that the nature of the polymer used for enzyme conjugation had a significant effect on the activity of the lipase used. E-Lipase showed increased specificity for water insoluble substrates, while CMC-lipase showed increased specificity for soluble substrates. Thus, E-lipase was found more than four times active than free lipase for hydrolysis of olive oil. CMC-lipase on the other hand, catalyzed hydrolysis of water soluble p-nitrophenyl acetate at a rate more than four times over free lipase.