Despite tremendous progress in the elucidation of three-dimensional structures of lipases, the molecular basis for their observed substrate preference is not well understood. In an effort to correlate the lipase structure with its substrate preference and to clarify the contradicting reports in the literature, we have compared the enzymic characteristics of two closely related recombinant lipases from the fungus Geotrichum candidum. These enzymes were expressed in the yeast Saccharomyces cerevisiae as fusions with an N-terminal poly(His) tag and were purified in a single step by metal-affinity chromatography. Their specific activities against a series of triacylglycerol substrates were compared using a titrimetric assay. The substrates varied in fatty acyl chain length, number of double bonds and their position along the chain. G. candidum lipases I and II (GCL I and GLC II) are markedly different with respect to their substrate preferences. For unsaturated substrates having long fatty acyl chains (C18:2 cis-9, cis-12 and C18:3 cis-9, cis-12, cis-15), GCL I showed higher specific activity than GCL II, whereas GCL II showed higher specific activity against saturated substrates having short fatty acid chains (C8, C10, C12 and C14). We have constructed a hybrid molecule containing the N-terminal portion of GCL I (including the flap covering the active site) linked to the C-terminal portion of GCL II. The hybrid molecule showed a substrate preference pattern identical to that of GCL II. These results indicate that sequence variation within the N-terminal 194 amino acids of G. candidum lipases do not contribute to the observed variation in efficiency by which the lipases hydrolyze their substrates. Moreover, it also shows that the flap region in GCL is not directly involved in substrate differentiation, even though this region is thought to be involved in recognition of the interface and in the activation of the enzyme.