The main aim was the production of lipases as additive in detergent industries and as laundry products for removing oil and fat stains. There is unmet need to establish local production of the commercially important lipase from local bacterial isolates of contaminated soil wastes. Bacillus subtilis, Staphylococcus aureus, Staphylococcus epidermidis and Escherichia coli were isolated from different waste sources viz., milk waste, slaughter house waste, engine oil waste and sludge soil waste and identified. All isolates were screened for lipolytic activity through Tween 80 hydrolysis test. Optimization of fermentation medium for maximum lipase production from both fermented broth and cell free supernatant was performed by using different carbon (glucose, olive oil and sucrose) and nitrogen (peptone, tryptone, beef extract and yeast extract) sources. Lipase production was observed at both 37 degrees C and room temperature after 24, 48, 72, 96 and 120 h incubation periods. Significantly highest lipase activity (14.180 +/- 0.01 U ml(-1) from cell free supernatant and 10.240 +/- 0.06 U ml(-1) from fermented broth) was obtained by B. subtilis (b1) using production medium 9 at 37 degrees C, pH 7 and after 72 h incubation as compared to other bacterial strains, production media, incubation periods and temperatures. It was concluded that the optimum conditions for lipase production were 37 degrees C, 48 h of incubation, olive, oil as carbon, and peptone and yeast extract as nitrogen source. It was well proved that the waste effluents can be used as a source for lipase production. The use of lipase would reduce the use of harmful chemical from the environment.