A second generation renewable raw material – tall oil, which is a by-product of the cellulose pulping, was valorised for polyol precursor synthesis. Tall oil fatty acids were epoxidized by in-situ generation of peroxy carboxylic acids in presence of immobilized lipase catalyst – Novozym® 435. The described epoxidation was carried out at milder conditions (40 °C) than typical epoxidation. No organic solvents and no additional carboxylic acids were used for proposed process. Relatively high yields of epoxide oxygen content were achieved (i.e. 4.49–6.00%). The influence of molar ratios between ethylenic unsaturation and hydrogen peroxide (1.0/1.0–1.2), Novozym® 435 catalyst content (1.5–4.5%) and hydrogen peroxide concentration (15–35%) on the epoxidation process were investigated. The epoxidation process was monitored by the change of the relative oxirane conversion and ethylenic unsaturation. The change of the chemical structure of the epoxidized tall oil was investigated using FTIR spectroscopy.