Precipitation of Chromobacterium viscosum lipase as an interfacial layer by addition of ammonium sulphate and t-butanol [in a process called three phase partitioning (TPP)] led to an increase in the initial rate of tranesterification in iso-octane by 4.9 times. It is shown that the TPP-treated lipase also showed salt activation and further increase in activity in the presence of sorbitol. Thus, in synergy with these strategies, the TPP treatment resulted in a more efficient design of catalytic transesterification; the overall increase in transesterification as a result of the optimization was about 15 times. (c) 2005 Elsevier Inc. All rights reserved.