Lipases have unique characteristics which makes it very attractive enzyme for industrial application. In recent times, the increasing demand of lipases in most of the industries necessitates the development in both qualitative advancement and qauntitative development. Hence, the aim of this study is to optimize the process conditions for lipase production by the isolate LJK 2(1)2. The strain originates from Jeli hot spring. The lipolytic activity of the isolate LJK 2(1)2 was observed on tributyrin agar. Four types of physical factors were analyzed which included inoculum size, incubation period, agitation speed and incubation temperature. As a result, the maximum lipase activity of 4.15 U ml⁻¹ was observed with 4% inoculum size. The lipase activity for optimum incubation period and agitation speed was 4.15 U ml⁻¹ at 40°c with the lipase activity of 4.0 U ml⁻¹. As a conclusion, the physical factors play an important role in lipase production. Thus, the determination of best point of maximum production in process conditions is crucial to improve the lipase production for industrial scale to minimize the manufacturing cost