Immobilization of enzymes on some solid supports has been used to stabilize enzymes in organic solvents. In this study, we evaluated applications of genetically immobilized Rhizopus oryzae lipase displayed on the cell surface of Saccharomyces cerevisiae in organic solvents and measured the catalytic activity of the displayed enzyme as a fusion protein with α-agglutinin. Compared to the activity of a commercial preparation of this lipase, the activity of the new preparation was 4.4 × 104-fold higher in a hydrolysis reaction using p-nitrophenyl palmitate and 3.8 × 104-fold higher in an esterification reaction with palmitic acid and n-pentanol (0.2% H2O). Increased enzyme activity may occur because the lipase displayed on the yeast cell surface is stabilized by the cell wall. We used a combination of error-prone PCR and cell surface display to increase lipase activity. Of 7,000 colonies in a library of mutated lipases, 13 formed a clear halo on plates containing 0.2% methyl palmitate. In organic solvents, the catalytic activity of 5/13 mutants was three- to sixfold higher than that of the original construct. Thus, yeast cells displaying the lipase can be used in organic solvents, and the lipase activity may be increased by a combination of protein engineering and display techniques. Thus, this immobilized lipase, which is more easily prepared and has higher activity than commercially available free and immobilized lipases, may be a practical alternative for the production of esters derived from fatty acids.