Article InfoIn the present study samples were collected from different sources such as oil contaminated soil (railway station), moist soil, barren land, garden soils and humus, near dairy and other soil samples in and around Shimla. FromTotal of 48 isolates were isolated from different samples, out of which four were selected on the basis of zone of hydrolysis on tributyrin-agar plates. Among these four isolates, Isolate -3 (Aspergillus niger) gave maximum production of lipase. Further the optimization of production and reaction conditions were carried out. Enzyme gave maximum activity in M3 medium with an inoculum size of 3.6×10⁵ spores, at incubation time of 72 h. The enzyme gave considerable amount of activity with maltose and peptone as carbon and nitrogen source respectively at a concentration of 2.0% each at pH 8.0, temperature of 40°C and 150 rpm. During the optimization of reaction conditions, the most favorable reaction conditions was found to be 40°C temperature for 15 minutes of incubation and it was observed that the enzyme showed maximum enzyme activity i.e. 4.3 U/mL with Tris HCl buffer (40 mM) of pH 8.0. A 2.17 fold increase in activity of lipase from fungal Isolate -3 (Aspergillus niger) was observed after optimization of culture and reaction conditions.