We proposed a convenient and accurate method for the measurement of lipase activity in a uniform aqueous-based substrate solution. In this work, lipase from Candida rugosa was used as the model lipase to test its catalytic ability toward p-nitrophenyl palmitate (p-NPP), which was suspended in a mixture of p-NPP ethanol solution and buffer. An ultraviolet–visible spectrophotometer was used to efficiently measure the liberated p-nitrophenol without extraction or centrifugation. Several factors that affected lipase activity were investigated, such as the ratio of p-NPP ethanol solution to buffer, the concentrations of p-NPP and lipase, as well as the temperature, reaction time, pH and agitation rate. Additionally, enzyme catalytic parameters such as Km, Vm and “activation energy” were also assessed. We determined the optimal conditions for lipase in this homogeneous system and demonstrated lipase's catalytic performance in this condition followed Michealis–Menten kinetics.