A hydrophobic substrate triolein was hydrolyzed by lipase in a mono-phase reaction system containing cyclodextrin(CD) as emulsifier. The triolein was transformation to an emulsion-like state in the CD containing reaction system in contrast to the oil-droplet like state without CD due to the formation of an inclusion complex between the lipids and CDs. The hydyrolysis reaction increased substantially in the CD containing reaction system, and the optimum reaction conditions including the amount of lipase, ${eta}$-CD concentration, and mixing ratio of triolein and ${eta}$-CD, were determined. The performance of the enzyme reaction in a mono-phase reaction system was compared with that of a two-phase reaction system which used water immiscible hexane as the organic solvent. The role of a CD in the mono-phase reaction system was elucidated by comparing the degree of the inclusion complex formation with triolein and oleic acid, Km and Vmax values, and product inhibition by oleic aicd in aqueous and CD containing reaction systems. The resulting enhanced reaction seems to be caused by two phenomena; the increased accessibility of lipase to triolein and reduced product inhibition by oleic acid through the formation of an inclusion complex.