Hydrolysis of virgin coconut oil (VCO) had been carried out by using an immobilised lipase from Mucor miehei (Lipozyme) in a water-jacketed batch reactor. The kinetic of the hydrolysis was investigated by varying the parameters such as VCO concentration, enzyme loading, water content, and reaction temperature. It was found that VCO exhibited substrate inhibition at the concentration more than 40% (v/v). Lipozyme also achieved the highest production of free fatty acids, 4.56 mM at 1% (w/v) of enzyme loading. The optimum water content for VCO hydrolysis was 7% (v/v). A relatively high content of water was required because water was one of the reactants in the hydrolysis. The progress curve and the temperature profile of the enzymatic hydrolysis also showed that Lipozyme could be used for free fatty acid production at the temperature up to 50°C. However, the highest initial reaction rate and the highest yield of free fatty acid production were at 45 and 40°C, respectively. A 100 hours of initial reaction time has to be compensated in order to obtain the highest yield of free fatty acid production at 40°C.