Abstract: A halotolerant strain of Aeromonas hydrophila was isolated from Vellar estuary, Parangipettai coast, Tamilnadu, India as a best enzyme producer using Tween 80 agar medium. Optimization studies revealed its maximum lipase production with optimized conditions such as 3% Tween80 as carbon source, 1% beef extract as nitrogen source, 0.3% fish waste as cheaper source, pH 9, temperature 37°C, 3% NaCl and 60 h incubation period. Optimized lipase partially purified with 60% Ammonium sulphate purification method results maximum enzyme production of 15 U/mL/L with 34 kDa molecular weight. The enzyme proved increased stability towards pH 7.5-9.5, 40-50°C and 15-30% of organic solvents for 1 h. The results concluded that the Aeromonas hydrophila is one of the potential alkaline lipase producing marine bacteria, with stability towards increased pH, temperature and organic solvents and preferable for further industrial applications.