In the present paper, a novel enzymatic reaction between (R,S)-O-butyryl propranolol (O-BP) and lipase from Candida rugosa in the presence of hydroxypropyl-beta-cyclodextrin (HP-beta-CD) is described. Under the used condition, lipase catalyzed the intramolecular transacylation of O-BP into N-butyryl propranolol (N-BP). Propranolol, the product of the expected hydrolysis reaction, was not detected in the reaction medium. A chiral analysis of the reaction product indicated that lipase showed a preference for (R)-O-butyryl propranolol since it first transformed the (R)-enantiomer and then the corresponding (S)-enantiomer. The influence of different reaction conditions on the initial rate is also studied.