Among the various fungal strains screened for lipase production, Rhizopus arrhizus NCIM 877, 878, 879 and Aspergillus niger NCIM 1207 produced significant quantities of enzyme when grown in synthetic oil based (SOB) medium under submerged conditions. Rhizopus strains showed major intracellular activity while A. niger NCIM 1207 produced mainly extracellular activity. Lipase production in A. niger NCIM 1207 was studied using both submerged fermentation (SmF) and solid state fermentation (SSF). De novo biosynthesis of lipase occurred only in the presence of lipid substrate and was completely repressed by glucose. The highest yields of enzyme were obtained in SSF using wheat bran as solid substrate in combination with olive oil as lipid substrate. Maximum lipase activity (630 IU/g dry solid substrate) was recovered when fermented wheat bran was extracted with NaCl (1%) supplemented with Triton X-100 (0.5%). The pH and temperature optima for lipase were 2.5 and 45 degreesC, respectively. The enzyme also exhibited high activity (75%) at extremely acidic pH of 1.5. Lipase activity (63%) was retained when enzyme was incubated in a buffer of 2.5 for 24 h at room temperature. The enzyme retained 63% of its original activity on incubation at 70 degreesC for 5 h. This organism, being GRAS cleared, can be used for large-scale production of enzyme for commercial purpose. (C) 2002 Elsevier Science Ltd. All rights reserved.