An extracellular lipase isolated from Pseudomonas sp. AG-8, had an optimal activity at 45 degrees C and pH 8.0-8.5. It retained more than 80% of its initial activity after keeping for 1 h at 65 degrees C. The enzyme was stable in 5 M NaCl and 6 M urea. Triton X-100 increased the lipase activity by 2.4 fold. Ca2+ ions activated the enzyme, while Zn2+, Fe2+, Fe3+ strongly inhibited its activity. Ethanol, methanol and acetone at 20% (v/v) enhanced the lipase activity by 2.9, 3.6 and 4.5 fold respectively. Dimethylsulphoxide at 90% (v/v) enhanced the enzyme activity up to 5.7 fold.