Enzymatic membrane bioreactors (MBR) have been studied for very different applications since many years. Submerged MBR has also been successfully used for treatment of wastewater. In the existing submerged configuration, the membrane works as the separation unit operation while the bioconversion is carried out by microorganisms suspended in the tank reactor. In the present work, a novel approach that combines the concept of biocatalyticmembranes and submerged modules is proposed for the treatment of biomass. Lipase enzyme from Candida rugosa has been immobilized in polyethersulphone hollow fiber (PES HF) membrane in order to develop atwoseparatephasebiocatalyticsubmergedmembranereactor in which the membrane works as both catalytic and separation unit. Furthermore, the submergedbiocatalyticmembranereactor is intended for production of valuable components from waste biomass, and different physical, chemical and fluid dynamics has been optimized. Response surface methodology (RSM) has been used to model the operating parameters and Box-Behnken method has been applied to maximize the fattyacidsproduction and optimization. At TMP 80 ± 2 kPa, pH 7.40 ± 0.1, temperature 35 ± 0.5 °C with an axial velocity of 0.07 ± 0.01 ms-1 and organic stirring 89.01 rad s-1 the system showed the global examined value within the experimental scope. The proof of principle using fried cooked oils has been performed in later period.