Production of fatty acid alkyl esters by lipase-catalyzed alcoholysis of waste plant oil from oil processing industry with primary alcohols in an organic solvent system was investigated. The catalytic activity of several commercial lipases on waste vegetable oil absorbed in activated bleaching earth and in organic solvent system was screened. Alcoholysis of palm oil with methanol was chosen for optimization of reaction conditions. Several variables, such as alcohol molar ratio, effect of organic solvent nature, and enzyme concentration were examined. Lipase from Candida cylindracea showed the highest activity in n-hexane only when waste activated bleaching earth was present, and during the first 4 It of reaction more than 78+/-6% (w/w) fatty acid alkyl ester with short chain length alcohols was attained. When C. clylindracea lipase-catalyzed alcoholysis with I-butanol, 96% (w/w) of fatty acid alkyl ester was produced in 8 h of reaction, but low activity was displayed in the presence of long chain alcohols. Reverse catalyzed reaction was also observed after reaching maximum conversion, leading to a gradual decrease in alkyl ester concentration. These results show a promising reutilization method of industrial waste resources containing waste vegetable oils for the, production of fatty acid alkyl esters targeted for biodiesel application. (C) 2003 Elsevier Inc. All rights reserved.