The ability of Candida cylindracea lipase produced using palm oil mill effluent (POME) as a basal medium to catalyze the esterification reaction for butyl butyrate formation was investigated. Butyric acid and n-butanol were used as substrates at different molar ratios. Different conversion yields were observed according to the affinity of the produced lipase toward the substrates. The n-butanol to butyric acid molar ratio of 8 and lipase concentration of 75 U/mg gave the highest butyl butyrate formation of 63.33% based on the statistical optimization using face centered central composite design (FCCCD) after 12 h reaction. The esterification potential of the POME based lipase when compared with the commercial lipase from the same strain using the optimum levels was found to show a similar pattern. It can be concluded therefore that the produced lipase possesses appropriate characteristics to be used as a biocatalyst in the esterification reactions for butyl butyrate formation.