Commercial oil-yielding seeds (castor, coconut, neem, peanut, pongamia, rubber and sesame) were collected from different places in the state of Tamil Nadu (India) from which 1279 endophytic fungi were isolated. The oil-bearing seeds exhibited rich fungal diversity. High Shannon-Index H' was observed with pongamia seeds (2.847) while a low Index occurred for coconut kernel-associated mycoflora (1.018). Maximum Colonization Frequency (%) was observed for Lasiodiplodia theobromae (176). Dominance Index (expressed in terms of the Simpson's Index D) was high (0.581) for coconut kernel-associated fungi, and low for pongamia seed-borne fungi. Species Richness (Chao) of the fungal isolates was high (47.09) in the case of neem seeds, and low (16.6) for peanut seeds. All 1279 fungal isolates were screened for lipolytic activity employing a zymogram method using Tween-20 in agar. Forty isolates showed strong lipolytic activity, and were morphologically identified as belonging to 19 taxa (Alternaria, Aspergillus, Chalaropsis, Cladosporium, Colletotrichum, Curvularia, Drechslera, Fusarium, Lasiodiplodia, Mucor, Penicillium, Pestalotiopsis, Phoma, Phomopsis, Phyllosticta, Rhizopus, Sclerotinia, Stachybotrys and Trichoderma). These isolates also exhibited amylolytic, proteolytic and cellulolytic activities. Five fungal isolates (Aspergillus niger, Chalaropsis thielavioides, Colletotrichum gloeosporioides, Lasiodiplodia theobromae and Phoma glomerata) exhibited highest lipase activities, and the best producer was Lasiodiplodia theobromae (108聽U/mL), which was characterized by genomic sequence analysis of the ITS region of 18S rDNA.