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Temperature and water activity (a w) of the reaction medium are two factors that govern enzyme reactions. We studied the influence of these two parameters on the esterification and transesterification activity of Carica papaya lipase in water and solvent free reactions. It was found that over the course of reaction the catalytic activity of C. papaya lipase was dependent on these factors. The best lipase activity for both reactions was at a temperature of 55°C and water activity of 0.22, which corresponds to 2 g of water per 100 g of C. papaya latex.