Pseudomonas aeruginosa secretes an extracellular lipase (EC 3.1.1.3), which has been isolated from culture media of either industrial fermentation of wild-type P. aeruginosa PAC1R or an overexpressing P. aeruginosa strain carrying a plasmid with the cloned lipase gene. Both culture supernatants contained enzymatically active lipase protein, as demonstrated by determination of hydrolytic activity using p-nitro-phenylpalmitate and 1,2-O-dilauryl-rac-glycero-3-glutaric acid resorufin ester as substrates and analysis by sodium dodacyl sulphate/polyacrylamide electrophoresis and Western blotting. Immobilization by entrapment into chemically inert hydrophobic silica gels was tested with crude enzyme preparations. A matrix consisting of tetramethoxysilane and propyl-trimethoxysilane at a molar ratio of 1:5 yielded the highest enzyme activity as determined by esterification of lauric acid with l-octanol in isooctane. The biotechnological potential of P. aeruginosa lipase to catalyse the kinetic resolution of chiral compounds was tested by enantioselective acylation of two different model compounds, racemic 1-phenylethanol and 2-pentylamine. Both compounds were acylated with high efficiency giving enantiomeric excess rates of more than 99% for the alcohol and 96% for the amine with an average conversion rate of 50%. These results demonstrated that P. aeruginosa lipase is an extremely useful enzyme for application in synthetic organic chemistry.