We have recently demonstrated that it is possible to carry out solid-state fermentation with lipase-producing bacteria and fungi and to add “lipolytic fermented solids” directly into a reaction medium to catalyze several different reactions, including esterification of fatty acids, transesterification of vegetable oils and hydrolysis of oils in high fat effluents. However, we have only demonstrated these processes at laboratory scale. In this presentation we will outline the many challenges that still need to be overcome and our efforts to do so. These challenges include: (i) Optimization of the production of lipolytic activity during the fermentation; (ii) Replacement of high cost medium components with residues, but without compromising the physical properties of the solid bed; (iii) Minimization of the loss of activity during drying of the fermented solids; (iv) Optimization of the reaction conditions and operating variables to maximize the desired activity during the application; (v) Prevention of leaching of the lipolytic activity of the solids during the application; and (vi) Scaling-up both the production of the fermented solid and the process that it is used to catalyze. In addition, the use of fermented solids to catalyze reactions brings phenomena that need to be characterized better, such as mass transfer limitations and the absorption of reaction species within the fermented solid.