Fungal strain from dairy waste contaminated soil was isolated for lipase production. The isolated strain was checked for lipase production and the species was identified morphologically by SEM and phylogenetically by NCBI-BLAST analysis. The culture conditions for production of lipase using the isolated fungus with mustard oil as substrate were optimized for obtaining maximum lipase activity and biomass by response surface methodology. Morphological identification and NCBI-BLAST analysis revealed the fungal strain to be of Aspergillus aculeatus. The optimum culture conditions were1% mustard oil concentration, incubation temperature of 35 ⁰C and incubation time of 214.74 h. The lipase activity and biomass at the optimized condition were 9.51 U/ml and 549.88 mg respectively. It can be concluded from the present study that the strain of the fungus Aspergillus aculeatus isolated from dairy waste contaminated soil can be potentially used to produce lipase.