Abstract: There is limited available information on the characterization of alkali-stable Bacillus sp. producing lipase and its commercial production. Therefore, thirty bacterial strains were isolated from oil industry soil samples and were screened for lipolytic activity. Bacillus sp. PD-12 was selected for lipase production because of its high lipolytic activity (4.2 IU mL-1). Bacillus sp. PD-12 lipase was optimally active at pH 8.0 and at 40°C temperature. The lipase is capable of hydrolyzing vegetable oils and synthetic triglycerides. Maximum lipase production by Bacillus sp. PD-12 was obtained when grown under shaking conditions (250 rpm) at 30°C for 24 h. In order to increase lipase production, optimization of carbon and nitrogen sources was studied. Maximum lipolytic activity (4.25±0.020 IU mL-1) was obtained with olive oil as a carbon source followed by coconut oil (2.5±0.030 IU mL-1). Among nitrogen sources, ammonium nitrate resulted in maximum lipolytic activity (15.6±0.036 IU mL-1). Lipase production by Bacillus sp. PD-12 was studied in a 3 liter fermentor with a working volume of 1.8 liter under optimized conditions resulted in lipolytic activity of 22 IU mL-1 after 21 h. Thus, short fermentation time (21 h) makes this fermentation system a promising one in terms of lipase productivity and alkali-stable Bacillus sp. can be used in detergent industry.