Lipids have not traditionally been considered likely candidates for catalyzing reactions in biological systems. However, there is significant evidence that aggregates of amphiphilic compounds are capable of catalyzing reactions in synthetic organic chemistry. Here we demonstrate the potential for the hydrophobic region of a lipid bilayer to provide an environment suitable for catalysis by means of a lipozyme, or lipid aggregate capable of speeding up a chemical reaction. By bringing organic molecules into the non-polar or hydrophobic region of a lipid bilayer, reactions can be catalyzed by collections of small, nonpolar or amphiphilic molecules. We demonstrate this concept by the ester hydrolysis of calcein-AM to produce a fluorescent product, which is a widely used assay for esterase activity in cells. The reaction was first carried out in a two phase octanol-water system with the organic phase containing the cationic amphiphiles cetyltrimethylammonium bromide (CTAB) or octadecylamine. The octanol was then replaced with DOPC added to the water in the form of vesicles, where the reaction was also found to be carried out. The reaction was monitored using quantitative fluorescence which revealed catalytic turnover numbers on a scale of 10−4s−1 for each system, which is comparable to some slow enzymes. The reaction product was characterized by 1H-NMR measurements which were consistent with ester hydrolysis. The implications of thinking about lipid aggregates as catalytic entities are discussed in the context of biochemistry, pharmacology and synthetic biology.