We have studied the substrate preference and specificity, including positional specificity, of a lipase purified from Staphylococcus aureus (strain FN 37). This extracellular bacterial enzyme is relatively insensitive to product inhibition, and hydrolyzes tri-, di- and monooleoylglycerol in emulsified and micellar form at similar rates and without marked substrate preference. The lipase lacks positional specificity, and the hydrolysis of triacylglycerol proceeds rapidly to free fatty acid and glycerol without accumulation of intermediary products.