Polyvinyl alcohol (PVA)/chitosan (CS) composite lipase membrane was prepared in this paper, which was used for enzymatic processing of fats and oils. The parameters, such as concentration of lipase, pH, and cross-linking agent as well as metal ions, which influence the immobilization of lipase in membrane, were optimized. The immobilized activity of lipase was 2.64IU/cm 2 with recovery of 24%. The membrane reactor was used in a two-phase system reaction to synthesize monoglyceride (MG) by hydrolysis of palm oil, which was reused for at least nine batches with yield of 32-50%.