Abstract: An extracellular acidic lipase producing fungi, screened and isolated from Palm Oil Mill Effluent (POME) dump sites, Pedavegi, West Godavari Dist, A.P., was found to be Emericella nidulans NFCCI 3643 by ribotyping of 28S rRNA gene. BLAST search following analysis of Phylogenetic tree revealed that its closest phylogenetic neighbor is Emericella fruticulosa strain CZ032. Optimization of process variables for the enhanced lipase production from Emericella nidulans NFCCI 3643 was carried out using traditional OFAT (One Factor At a Time) method and found that the best production medium for highest lipase yield was Lipase Production Medium (LPM) 3 containing 1.5% Olive oil as sole carbon source, 1% (NH4)2S04 as nitrogen source, 0.5% Gum arabic as surfactant, pH 6 at 30°C and 150 rpm.