Staphylococcus isolated from a common Indian sweet viz. basundi was tested for its ability to produce lipase. The colorless zone of hydrolysis around the colony grown on Baird Parker agar containing egg yolk produced extracellular lipase. Colony morphology, coagulase production, haemolysis, acid production in carbohydrate medium and enzyme activity studies showed that the organism was Staphylococcus warneri. Growth of S. warneri was obtained after 11 hr at 37 degrees C, pH 7.5, while the maximum production of lipase was obtained at 30 degrees C at pH 6.5 after 9 hr of incubation. Agitation did not increase lipase production. A sudden fall in the activity of lipase was noted after 11 hr. Addition of sucrose which is a growth stimulant for Staphylococcus, did not stimulate production of lipase by these organisms. Also, addition of oleic acid, Tween 80 or ethanol did not stimulate formation of lipase.