Batch and repeated batch (fed-batch type) experiments were carried out for lipase production using immobilised Candida rugosa cells in packed-bed bioreactors (PER). Among the immobilising agents tested, namely agar, calcium alginate and polyacrylamide, calcium alginate was found to be the most suitable gelling agent with a cell loading of 10 mg cells (wet wt) per g of gelling agent. When the substrate was recycled, the lipase yield increased, indicating better utilization of the substrate. Addition of fatty acids at 0.75 g/litre improved the enzyme yield and caprylic acid proved to be the best in this regard (14.9 U of lipase at 36 h). Supplementing the medium with gum arabic in combination with caprylic acid further improved the lipase yield. Maximum enzyme (17.94 U/ml) was produced when the fermentation was carried out in a PER in repeated-batch mode using a feed medium containing gum arabic and caprylic acid, keeping the flow rate of the feed at 0.4 ml/min and allowing each cycle to persist for 12 h.