The most thoroughly studied enzyme in directed evolution is the lipase from Pseudomonas aeruginosa (PAL) as a catalyst in the hydrolytic kinetic resolution of 2-methyldecanoic acid p-nitrophenyl ester. Seminal studies utilized epPCR, saturation mutagenesis and DNA shuffling or combinations thereof. With current emphasis on efficacy in laboratory evolution, however, we recently applied our previously developed method, iterative saturation mutagenesis (ISM), to the same catalytic system, discovering that this approach is much more efficient than the original strategies. Herein, we consider PAL once more, this time testing ISM as a means to broaden the substrate scope of this lipase by studying bulky substrates of the type 2-phenylalkanoic acid esters as substrates that are not accepted by the WT. Highly active and enantioselective (E up to 436) mutants were evolved, a process that required only small mutant libraries and thus a minimum of screening effort. A theoretical investigation using molecular dynamics simulations and docking experiments revealed the source of enhanced activity and stereoselectivity.