A lipase-catalyzed enantioselective continuous hydrolysis process under in situ racemization of substrate using sodium hydroxide as catalyst was developed for the production of (S)-Naproxen from racemic Naproxen methyl ester in an aqueous-organic biphase system. Use of a tubular silicone rubber membrane in the stirred tank reactor to separate the chemical catalytic racemization and biocatalytic resolution processes, served to avoid the key problem associated with conventional dynamic resolution, viz the incompatibility of in situ chemical racemization with the presence of a biocatalyst. To overcome product inhibition and to facilitate product recovery from the aqueous-organic emulsion containing substrate and lipase, a hydrophilic porous semipermeable membrane was used in the stirred tank reactor. Greater than 60% conversion of the racemate with an enantiomeric excess of product (ee(p)) greater than 96% was obtained. In addition, transformation of Candida rugosa Lipase (CRL) isoenzymes was observed in the reaction process.