Factors affecting growth and lipase production by Penicillium chrysogenum were studied. The optimum conditions for lipase production by the mold were 30°C at pH 6.0. In shake cultures, lipase production was enhanced by 70%. Amongst several carbohydrates that were examined, maximum lipase production occurred in medium containing glucose, followed by maltose, mannitol, galactose, sucrose, lactose and fructose in the decreasing order. Out of different nitrogen sources peptone proved most stimulatory.