The objective of this study was to investigate the effect of alkali treatment on properties of shellac. The native shellac was treated with sodium hydroxide for 15, 30, and 60 min to obtain hydrolyzed shellac. All types of shellac, namely native and hydrolyzed shellac at various times of treatment, were then prepared in films as free acid and ammonium salt forms by using ethanol and ammonium hydroxide solution, respectively. The results showed that alkali treatment caused an increase in acid value and a decrease in ester value. This is due to higher free carboxylic and hydroxyl groups caused by ester bond breaking. The longer the alkali treatment the higher impact of bond breaking, therefore, causing an increase in acid value, solubility at pH 7, strain, a decrease in ester value, water vapor permeability coefficient, and stress. The films were then kept at 40 degrees C, 75% RH for a period of three months. The aging effect led to an esterification of free carboxylic and hydroxyl groups, resulting in the significant change of acid value, ester value, and insoluble solid for both native and hydrolyzed shellac films in acid form. On the other hand, all types of shellac films in ammonium salt form exhibited a reasonable stability in physicochemical and mechanical properties as all films were protected from the esterification due to the formation of ammonium salt at the carboxylic binding site. It could be concluded that alkali treatment could produce hydrolyzed shellac with higher solubility in the intestine, the stability was yet in dilemma unless the shellac was in an ammonium salt form. The result obtained could, thus, provide a guideline in the use of shellac.