Abstract: A novel thermostable lipase from Shewanella putrefaciens was identified, expressed in Escherichia coli, characterized and used in biodiesel production. Enzyme characterization was carried out by enzyme assay, SDS-PAGE and other biochemical reactions. The recombinant lipase was found to have a molecular mass of 29 kDa and exhibited lipase activity when Tween 80 was used as the substrate. The purified enzyme showed maximum activity at pH 5.0 and at 80°C. The recombinant lipase was used for the transesterification of canola oil and waste oil. The enzyme retains 50% of its activity at 90°C for 30 minutes. It is also able to retain 20% of its activity even at 100 °C for 20 minutes. These properties of the obtained new recombinant thermostable lipase make it promising as a biocatalyst for industrial processes.