Candida rugosa lipase was encapsulated within a chemically inert sol-gel support prepared by polycondensation with tetraethoxysilane and octyltriethoxysilane in the presence of β-cyclodextrin-based polymer. The catalytic activity of the encapsulated lipases was evaluated both in the hydrolysis of p-nitrophenylpalmitate and the enantioselective hydrolysis of racemic Naproxen methyl ester. It has been observed that the percent activity yield of the encapsulated lipase was 65 U/g, which is 7.5 times higher than that of the covalently immobilized lipase. The β-cyclodextrin-based encapsulated lipases had higher conversion and enantioselectivity compared with covalently immobilized lipase. The study confirms an excellent enantioselectivity (E >300) for the encapsulated lipase with an enantiomeric excess value of 98% for S-naproxen. © Springer Science+Business Media, LLC 2012.