Extracellular lipase production by Staphylococcus epidermidis CMST Pi 2 isolated from the intestine of shrimp Penaeus indicus has been investigated in shake-flask experiment using different preparations of tuna-processing waste such as raw fish meat, defatted fish meat, alkali hydrolysate, and acid hydrolysate as nitrogen source. Among the tested tuna preparations, defatted fish meat supported the maximum lipase production, and 2.5% concentration of the same was found to be optimum for maximizing the lipase production. The effect of carbon sources on lipase production revealed that glucose aided the higher lipase production than any other tested carbon source and a concentration of 2% glucose registered as optimum to enhance the lipase production. The halotolerancy of S. epidermidis CMST Pi 2 for lipase production indicated that 4% of sodium chloride was optimum to yield maximum lipase. Among the surfactants tested, lipase production was high in Tween 20 added medium when compared to other surfactants, and its optimum concentration recorded was 0.8%. Partial characterization of crude enzyme revealed that pH 7 and 55 degrees C temperature were optimum for maximum lipase activity.