BACKGROUND: Lipase production by Penicillium simplicissimum using soybean meal as substrate has been investigated. A factorial design technique was used to evaluate the effects of incubation temperature, initial moisture of the meal and substrate supplementation with low cost supplements, on lipase production. Soybean oil and wastewater from a slaughterhouse, which is rich on oil and fat, corn steep liquor and yeast hydrolysate, were tested as supplementary carbon and nitrogen sources. RESULTS: Cultivation conditions were optimized for the production of lipase by factorial design and response surface methodology. Results show that the microorganism produces very low protease activity (0.21 U gds(-1) dry substrate), which helps to maximize lipase production. Soybean meal without supplements appears to be the best medium of those tested for lipase production by P. simplicissimum. CONCLUSION: This work showed that temperature and moisture are the factors that most strongly influence lipase production by P. simplicissimum using soybean meal as substrate. The growth conditions that optimize lipase production are 27.5 degrees C using substrate with 550g kg(-1) of initial moisture. In optimum conditions lipase activity of 30 U gds(-1) dry substrate was obtained. (c) 2007 Society of Chemical Industry.