More and more industrial chemistry reactions rely on green technologies. Enzymes are finding increasing use in diverse chemical processes. Epoxidized vegetable oils have recently found applications as plasticizers and additives for PVC production. We report here an unusual activity of the Malassezia globosa lipase (SMG1) that is able to catalyze epoxidation of alkenes. SMG1 catalyzes formation of peroxides from long chain carboxylic acids that subsequently react with double bonds of alkenes to produce epoxides. The SMG1 is selective towards carboxylic acids and active also as a mutant lacking hydrolase activity. Moreover we present previously unobserved mechanism of catalysis that does not rely on acyl-substrate complex nor tetrahedral intermediate. Since SMG1 lipase is activated by allosteric change upon binding to the lipophilic-hydrophilic phase interface we reason that it can be used to drive the epoxidation in the lipophilic phase exclusively.