Hydrolysis of palm oil has become an important process in Oleochemical industries. Therefore, an investigation was carried out for hydrolysis of palm oil to fatty acid and glycerol using immobilized lipase in packed bed reactor. The conversion vs. residence time data were used in Michaelis-Menten rate equation to evaluate the kinetic parameters. A mathematical model for the rate of palm oil hydrolysis was proposed incorporating role of external mass transfer and pore diffusion. The model was simulated for steady-state isothermal operation of immobilized lipase packed bed reactor. The experimental data were compared with the simulated results. External mass transfer was found to affect the rate of palm oil hydrolysis at higher residence time.