A crude lipase, Newlase F, was used to remove C-terminal protecting groups from dipeptide esters. Hydrolysis of dipeptide n-heptyl esters with Newlase F was conducted in aqueous media containing acetonitrile. The optimum pH and temperature of lipase in Newlase F were 7.0 and 30 ◦C, respectively. Low level acetonitrile promoted the hydrolysis of dipeptide n-heptyl esters, while high level acetonitrile inhibited the hydrolysis. However, the protease activity in Newlase F was significantly inhibited by acetonitrile. Lipase in Newlase F worked better in a medium containing water-miscible organic solvents than in water-immiscible ones. N-terminal protecting groups were not affected by the protease in the crude enzyme. It was found that the protease in Newlase F did not hydrolyze amide bond with hydrophilic amino acids on either side under these conditions (pH 7.0, room temperature). Newlase F may consequently be used widely in the synthesis of peptide conjugates. The crude enzyme was immobilized on SBA-15 mesoporous molecular sieve. The lipase activity of immobilized preparation was more active on hydrolysis of C-terminal protecting groups and stable than the free enzyme. The immobilization also reduced the protease activity.