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The cost of lipases and the relatively slower reaction rate remain as the major obstacles for enzymatic production of biodiesel as opposed to the conventional chemical processes. This paper reviews the starting oils usually employed in biodiesel production, the processes for transforming them to biodiesel placing particular emphasis on enzymatic transesterification. The pros and cons of the lipase-based process, the key operational variables and the technological alternatives for attenuating lipase deactivation are also discussed. Finally, suggestions are made for future studies, paying particular attention to the use of whole cell immobilization in the production process, as this methodology may reduce both the cost of the biocatalyst and dependence on lipase manufacturers.