Fatty acids present in crude palm oil are normally removed in processing and result in a yield loss. This investigation studied if they could be recovered through an enzymatic condensation reaction. Free fatty acids (FFA) present in crude palm oil at a level of 4.8%-7.2% could be converted back to triacyl glycerols utilising a microbial esterase to perform a condensation reaction with mono and diglycerides present in the oil. The rate of removal of fatty acids could be increased by the addition of glycerol to provide more sites for attachment. However, the addition of glycerol resulted in an increase in the mono and diglyceride content of the oil as the fatty acid preferentially attached to this molecule. In a glycerol free system, the reduction in fatty acids was achieved when an immobilised form of the enzyme was used. This enzyme did not cause significant interesterification of the palm oil, an advantage for later fractionation. An addition of a small amount of palmitic acid (3% w/w), to the reaction gave a lower residual level of mono and diglycerides compared to a reaction with only the intrinsic level of FFA.