The production of biodiesel was investigated using a lipase-catalysed (Novozym 435) reaction involving methyl acetate and ionic liquid [BMIM][PF6] as a co-solvent to produce an environmentally friendly, "green" process. Experiments were conducted at various amounts of ionic liquid. The reaction mechanism was examined through use of kinetic modelling and the effect of ionic liquid was studied for the first time. Studies indicated that the reaction followed a Ping-Pong Bi-Bi mechanism, and that the ionic liquid present in the system led to reduced initial reaction rates due to mass transfer limitations.