A gene coding for cold-active lipase from the psychrotrophic Gram-negative bacterium Psychrobacter cryohalolentis K5(T) isolated from a Siberian cryopeg has been cloned and expressed in Escherichia coli. The recombinant protein Lip1Pc with a 6× histidine tag at its C-terminus was purified by nickel affinity chromatography. With p-nitrophenyl dodecanoate (C12) as a substrate, the purified recombinant protein displayed maximum lipolytic activity at 25°C and pH 8.0. Increasing the temperature above 40°C and addition of various metal ions and organic solvents inhibited the enzymatic activity of Lip1Pc. Most nonionic detergents, such as Triton X-100 and Tween 20, slightly increased the lipase activity, while SDS completely inhibited it. To investigate the functional significance of the Lip1Pc N-terminal domain, we constructed five deletion mutants of this protein. The ND1 and ND2 mutants displayed specific activity reduced by 30-35%, while other truncated proteins were completely inactive. Both mutants demonstrated increased activity towards p-nitrophenyl decanoate (C10) and impaired utilization of C16 substrate. Although optimum reaction temperature of ND2 lowered to 20°C, it displayed enhanced stability by 44% after incubation at 40°C. The results prove that the N-terminal domain of Lip1Pc has a fundamental impact on the activity and stability of the protein.