A gene encoding an extracellular lipase (CaLIP4) from Candida albicans was successfully expressed in Saccharomyces cerevisiae after mutagenesis of its unusual CUG serine codon into a universal one. The ability of this lipase, which shares 60% sequence homology with the lipase/acyltransferase from Candida parapsilosis, to synthesise esters was investigated. CaLIP4 behaved as a true lipase, displaying activity towards insoluble triglycerides and having no activity in the presence of short-chain fatty acid (FA) esters and phosphatidylcholine. Methyl, ethyl and propyl esters were efficiently used. The lipase exhibited highest selectivity for unsaturated FA. With saturated FAs, C14-C16 acyl chains were preferred. In a biphasic aqueous/lipid system, CaLIP4 displayed a high alcoholysis activity with a range of alcohols (e.g. methanol, ethanol, propanol and isopropanol) as acyl acceptor. During the course of the alcoholysis reaction, new esters are produced at concentrations above the thermodynamic equilibrium of the esterification reaction, indicating that ester synthesis does not proceed by esterification but mainly by direct acyltransfer. Ester synthesis is under kinetic control due to the high rate of alcoholysis. Unwanted hydrolysis is limited by competition between the acyl acceptor (alcohol) and water for the acyltransfer reaction, favouring the alcohol