The effects of the pretreatment of immobilized Candida antarctica lipase enzyme (Novozym 435) on methanolysis for biodiesel fuel production were investigated. Methanolysis progressed much faster when Novozym 435 was preincubated in methyl oleate for 0.5 h and subsequently in soybean oil for 12 h. The initial reaction rate of methanolysis catalyzed by both the non-treated and preincubated enzyme decreased significantly with increasing water content. The initial reaction rate increased with increasing methanol content, showed a maximum, and thereafter decreased when the methanol content was increased further. The variation of the initial reaction rate with the methanol content was therefore analyzed using a Michaelis-Menten-type equation with substrate inhibition. Based on this equation, a procedure for the stepwise addition of methanol to the reaction mixture so as to maintain the desired methanol content was determined. When preincubated Novozym 435 was used, the ME content reached over 97% within 3.5 h by stepwise addition of 0.33 molar equivalent of methanol at 0.25-0.4 h intervals.