The oil degradation capability of Pseudomonas sp. were tested using lipase enzyme producing bacterial strains from petroleum oil contaminated areas. The high level of lipase production was observed at temperature range from 30° to 37°C and a pH of 4 to 7. The optimum pH and temperature was 7 and 37°C for the strain Pseudomonas sp. respectively. The presence of sucrose and yeast extract in the medium enhanced enzyme production when compared with other carbon and nitrogen sources. Pseudomonas sp. can be effectively used to degrade petroleum oil contaminated soils and also considered as a key component in the cleanup strategy for bioremediation of petroleum oil.