Reactions involving tert-alcohols and their esters are generally not catalyzed by lipases. Candida rugosa lipase is one of the few lipases which shows at least limited catalytic activity towards tert-alcohols and their esters. Using transesterification of tributyrin with tertiary butyl and amyl alcohols as a model reaction, it is shown that precipitation of lipase by a tertiary alcohol in the presence of a buffer with optimum concentration enhances the catalytic activity 7 fold as compared to rates obtained with lyophilized powders. Optimization of the ratio of triglyceride to tert-alcohols and medium engineering gave an initial rate which was 41 times higher than that obtained with lyophilized powders. Hence, use of a simple enzyme formulation, coupled with optimization of reaction conditions led to Candida rugosa lipase becoming a useful catalyst for catalyzing transesterification involving tertiary alcohols.