Microbial lipases hold a prominent position in biocatalysis by their capability to mediate reactions in aqueous and nonaqueous media. Herein, a lipase from Penicillium fellutanum was biochemically characterized and investigated its potential to degrade poly (ɛ‐caprolactone) (PCL). The lipase exhibited stability over a broad pH spectrum and performed best at pH 8.5 and 45 °C. The activation energy was determined to be 66.37 kJ/mol by Arrhenius plot, whereas Km and Vmax for pNPP hydrolysis were 0.75 mM and 83.33 μmol/mL/Min, respectively. A rise in temperature reduced the Gibbs free energy, whereas the enthalpy of thermal unfolding (∆H*) remains the same up to 54 °C following a modest decline at 61 °C. The entropy (∆S*) of the enzyme demonstrated an increasing trend up to 54 °C and dropped at 61 °C. Lipase retained stability by incubation with various industrially relevant organic solvents (benzene, hexanol, ether, and acetone). However, exposure to urea and guanidine hydrochloride influenced its catalytic activity to different extents. Under optimal operating conditions, lipase catalyzed the excellent degradation of PCL film degradation leading to 66% weight loss, increased surface erosion, and crystallinity. Fourier‐transform infrared spectrometry, differential scanning calorimetry, and scanning electron microscopy studies monitored the weight loss after enzymatic hydrolysis. The findings indicate that P. fellutanum lipase would be a prospective biocatalytic system for polyesters depolymerization and environmental remediation.