Abstract: The effect of temperature on enzymatic transesterification was studied by many researchers for process optimization purposes. The optimum operating temperature was defined on the basis of high FAME productivity or lipase activation without considering the lipase denaturation factor. High thermal energy was favored to accelerate transesterification reaction but lipases for enzymatic transesterification reaction were susceptible to denaturation even at moderate temperature operation. In this work, studies of thermal effects on lipase kinetics were carried out to propose the most desirable operating temperature that achieves high FAME productivity while preserving lipase catalyzing activity. Catalyzing activity of Lipozyme TL IM increased with temperature up to a threshold at 40°C and successive fell beyond this value have explained the occurrence of reversible biocatalyst inactivation. The reaction rates obtained for experiment under different heat treatments have confirmed the deactivation process of Lipozyme TL IM follows first-order kinetics pattern. The most desirable operating temperature for transesterification reaction is 40°C that leads to the highest productivities, 100 % FAME yield at 4 hrs while preserving acceptable stability levels of 1.09% activity lost after 1 hrs.