The effects of enzymatic hydrolysis of used-frying oil were carried out using an immobilized lipase from Candida rugosa in solvent-free system. Used-frying oil was used as a substrate in this study due to abundance amount of used-frying oil present in Malaysia as its disposal problem become a very serious environmental issue. The high free fatty acids (FFA) content in used-frying oil has raised the interest for the utilization of this waste into valuable products. Even though used-frying oil is not suitable for human consumption and being extensively used for biodiesel production, FFA from used-frying oil could be utilized to produce various types of non-edible products. Effects of enzyme loading, water content, reaction temperature, buffer pH and agitation speed on the degree of hydrolysis were investigated. The experiments were conducted at constant 3 hours reaction time. It was found that the effect of variables were very significant by influencing the hydrolysis process. The hydrolysis process achieved the highest yield of fatty acids at enzyme concentration of 1.5% (w/v), buffer volume to oil volume ratio of 3:1, temperature of 40 ÌŠC, pH of 7 and agitation speed of 220 rpm. Under these described conditions, nearly 98.1% degree of hydrolysis was achieved. A kinetic model based on Michaelis-Menten equation was used to determine the rate constant of Vmaxand Kmand it was found that the values are20.8333μmol/ml.min and0.0833g/ml respectively which were gained from Lineweaver-Burk plot.