Lipases are defined as triacylglycerol acylhydrolases (EC and are involved in the hydrolysis of fats and oils to yield glycerol and free fatty acids. A bacterial strain, isolated from the soil contaminated with diesel oil exhibited lipolytic activity on tributyrin agar plate with remarkable zone of clearance. The isolated strain was identified as gram positive, rod shaped bacteria, while the biochemical result showed that the isolate was catalase, urease, citrate utilization and methyl red positive; VP test was negative. The bacterial strain was found to produce extracellular as well as intracellular lipase. Maximum extracellular lipase activity in the culture supernatant was found to be 28.5 U/ml and the maximum intracellular lipase activity obtained from pellet was 5.6 U/ml upon enzyme assay. Lipase was partially purified using ammonium sulphate precipitation and the maximum lipase activity was recorded in the fraction precipitated by 30-60% saturation. Protein content in purified lipase was measured by lowry method and was found to be 0.5 mg/ml. Partially purified lipase showed fairly appreciable thermostablity activity up to 55-60ºC but a marked decrease was observed in the activity above this temperature. The lipase activity remained stable in the pH range of 2.0–10.0. The effect of detergents were studied after incubating the purified lipase with 1% detergents like tween-20, tween-80 and SDS. Addition of detergents, like tween-20, tween-80 did not alter the lipase activity, while SDS resulted in the loss of enzymatic activity. Incubation of the isolated lipase with organic solvents like isopropanol, toluene, hexane, ethanol, methanol and xylene, showed that 90% activity remained even after 12 hrs incubation; thus indicating its chemically stable nature. The isolated strain was found to esterify oleic acid with ethanol resulting in the formation of ethyl oleate which was confirmed by thin layer chromatography