Generally, olive oil can be used in recipes that call for melted solid shortening. It cannot always replace solid or semi-solid shortening in recipes. Olive oil is itself a liquid form of shortening, a word coined to describe fat's effect on the gluten in flour; it shortens strands of gluten to create a finer texture, such as in cakes, rather than the chewy texture of stretched-out gluten in breads.
Some studies of industrial baking have found that liquid oils, such as olive oil, cannot be used in place of solid and semi-solid shortening, but oils combined with emulsifiers can. For home use, olive oil can be used in place of semi-solid shortening for recipes that are baked and have other ingredients with strong flavors to drown out olive oil's strong, distinctive flavor, which diminishes when heated. Baked goods such as certain pie crusts and cookies must be made exclusively with solid and semi-solid shortening, such as butter or lard, to create the desired texture. Olive oil cannot substitute for semi-solid shortening in recipes which need to remain solid at room temperature, such as cake frosting. For cooking, olive oil can easily be substituted for solid and semi-solid shortening, such as butter, margarine and lard, when frying or sautéing, as long as its distinct flavor is taken into consideration.