The utilisation of palm oil and its fractions by Penicillium chrysogenum for growth and penicillin production is strain-dependent. Strain H1107 could utilise crude palm oil, its liquid (palm olein) and solid (palm stearin) fractions and its component fatty acids (oleic, palmitic, stearic and myristic) as the main carbon source; strain M223 could not. Cell-bound lipase activity was higher in H1107 than in M223.