Biodiesel production from crude tall oil (CTO) in presence of a commercial lipase catalyst (Eversa Transform) was optimized using Taguchi method. Process parameters including reaction temperature, molar ratio of CTO to methanol, reaction time, and enzyme dose were examined for their effect on the in-situ esterification of fatty acids (FA) in CTO to fatty acid methyl ester (FAME). Fractional distillation was employed to separate the FAME fraction (biodiesel) from the rest of the CTO components. Using Taguchi (L9) Orthogonal Design, the optimum biodiesel yield was statistically predicted and experimentally verified as 97.02% and 96.57%, respectively. The optimal conversion of CTO to crude biodiesel was obtained at 16 h reaction time, 40 degrees C reaction temperature, 1:1.5 CTO to methanol molar ratio, and 1.0 wt% enzyme dose. The reaction time and CTO to methanol molar ratio were the two most contributing factors for the optimal conversion of CTO to biodiesel.