A non interpenetrating supported carbon membrane was prepared using a resole-type phenol-formaldehyde resin as precursor. Amine groups were created on the carbon membrane through nitration using NO, and used to immobilize lipase enzyme by reacting with glutaraldehyde. To maintain high enzyme activity, surface carboxylic groups were modified and the immobilized enzyme on the membrane thus obtained was active even after 3 months of usage. The performance of the biphasic membrane reactor is studied in terms of amount of free fatty acid produced per unit time based on the volume of aqueous phase and the effect of operating variables (pH of aqueous phase solution, solvent used for olive oil, olive oil concentration, and aqueous phase circulation rate) were evaluated. Experiments show that the activity of lipase increases 1.42-fold upon immobilization. The maximum reaction rate was 3.6-fold higher, and the base case rate was 1.4-fold higher than the values reported in the literature for a similar enzyme membrane reactor but with a different membrane. (c) 2005 American Institute of Chemical Engineers.