Diglyceride (DG) was prepared by reaction of soybean oil and glycerol in the presence of lipase. The initial rate of DG production was greatly affected by the amount of lipase. However the DG content at equilibrium was hardly affected by the amount of lipase added to the reaction mixture. The initial rate of FFA formation was highly affected by the moisture content between 0.5 and 2.3%, but at higher water content (3.3-5.2%), there was a small increase in the rate. And DG content at equilibrium slowly increased with the increase of the water content in glycerol up to 4.4%. However, there was a sharp decrease in DG content at higher water content (5.2-6.4%) due to higher free fatty acid production. The highest yield of DC was obtained at the temperature ranges of 30-5$0^{circ}C$. The final yield of DG was not dependent on the glycerol (GL) to triglyceride (TG) molar ratio. However, at the molar ratio of 0.75:1 (GL/TG), the enzyme-catalyzed reaction was highly efficient and utilized all the glycerol. In optimized conditions for glycerolysis a yield of approximately 45% DG was obtained. 66% of total DG was 1,3-DG.