Lipases are hydrolytic enzymes that hydrolyse triglycerides to free fatty acids and glycerol. Isolation and screening of lipolytic microorganisms from different environmental samples of different ecological habitat have been left relatively unexplored. Thus, a total of 37 bacteria 17 fungi were isolated from different environmental samples and screenedfor lipase production. Three bacterial isolates and fungal isolates each with maximum lipase activity on lipase assay medium were selected for further study. Fermentation pattern was studied by varying process parameters like initial pH of production media, incubation temperature, different substrates, substrate concentration and agitation in order to maximize extracellular lipase production. Coconut oil was found to induce best lipase production in bacteria and fungi in which Acinetobacter sp. (1.45 U/ml) and Hypocrea patella (10.00 U/ml) had the highest lipase production. Fermentation period between 3-7days was found to be the best for lipase production in fungi and 12-24 h in bacteria.The study has proven that optimization of growth parameters in a suitable fermentation medium has significant effect on improved lipase production.