Starmerella bombicola lactone esterase, a novel enzyme of the CALA serine hydrolase family catalyses an unusual reaction wherein acidic sophorolipids are esterified intramolecularly in an aqueous environment. This holds potential for use in ‘green’ synthesis of macrolactone pharmaceuticals. In view of its potential biotechnological applications, our project is to determine its structural, enzymatic and functional properties to reveal its reaction mechanism.