Polysiloxane-polyvinyl alcohol hybrid matrix was prepared by a sol-gel technique and its capacity to bind porcine pancreatic lipase investigated. The loading of 250 units g(-1) support was shown to be effective, resulting in an immobilized lipase with high catalytic activity. Both free and immobilized lipases were characterized by determining the activity profile as a function of pH, temperature, substrate concentration and thermal stability. Application of the immobilized lipase in non-conventional biocatalysis for the synthesis of surfactant; and biodiesel was also analyzed. Production of sugar fatty acid esters was found to be dependent on the carbohydrate and the highest molar conversion (50% in 3-4 h of reaction) was achieved for substrates containing fructose and lauric or oleic acids. Biodiesel synthesis from babassu oil and ethanol, propanol or butanol was feasible and regardless of the kind of alcohols, results revealed that the immobilized PPL could efficiently convert triglycerides to fatty acid alkyl esters attaining yields varying from 75 to 95%. (c) 2007 Society of Chemical Industry