In the present investigation, a new fungal inulinase producer Penicillium amphipolaria KAS 2555 has been isolated from the soil of dead mangroves litter area, followed by the inulinase production and optimization by solid-state fermentation using a low-cost substrate – hardy sugarcane (Saccharum arundinaceum). While screening, only Penicillium amphipolaria KAS 2555 showed the hydrolysis zone on the plate containing inulin media. The exoinulolytic nature of inulinase and its form of action was confirmed by thin-layer chromatography (TLC). After 96 h of the fermentation period, an activity of 2.45 U/gds was obtained. The I/S ratio of 0.59 proved that the enzyme is inulolytic in nature. Media optimization was performed to obtain a regression model using Central Composite Design (CCD). For optimization, five significant media components viz., inulin, (NH4)2SO4, K2HPO4, KH2PO4 and, NaCl were used. A 3.10-fold increase in activity of inulinase (7.59 U/gds) was obtained under the optimal settings of (g/gds) inulin- 0.1, (NH4)2SO4- 0.002, K2HPO4- 0.1, KH2PO4- 0.02 and NaCl- 0.02.