Herein we report the optimization of enzymatic hydrolysis of a mixture of capsaicinoids, capsaicin and dihydrocapsaicin obtained from chili peppers, and the utilization of the isolated fatty acids for the modification of coconut oil using enzyme catalyzed acidolysis. This work was carried out as the fatty acids that can be isolated from capsaicinoid hydrolysis have been shown to possess interesting biological properties. These biological properties could be better exploited by incorporating the fatty acids into a suitable delivery vehicle. The enzymatic hydrolysis of the mixture of capsaicin and dihydrocapsaicin was carried out using Novozym® 435 in phosphate buffer (pH 7.0) at 50°C. The enzyme catalyst could be reused in multiple cycles of the hydrolysis reaction. The desired 8-methyl-6-trans-nonenoic acid and 8-methylnonanoic acid were isolated from the hydrolysis reaction mixture using a simple extraction procedure with a 47.8% yield. This was carried out by first extracting the reaction mixture at pH 10 with ethyl acetate to remove any dissolved capsaicinoids and vanillyl amine side product. The fatty acids were isolated after adjustment of the pH of the reaction mixture to 5 and second extraction with ethyl acetate. The acidolysis of coconut oil with the obtained fatty acids was performed using Lipozyme® TL IM. The performance of the acidolysis reaction was evaluated using 1H-NMR spectroscopy and verified in selected cases using gas chromatography. The best performing conditions involved carrying out the acidolysis reaction at 60°C with a 1.2 w/w ratio of the fatty acids to coconut oil and 10% enzyme loading for 72 h. This resulted in the incorporation of 26.61% and 9.86% of 8-methyl-6-trans-nonenoic acid and 8-methylnonanoic acid, respectively, into the modified coconut oil product. This product can act as a potential delivery vehicle for these interesting compounds.