The objective of this study was to isolate and characterize thermostable microbial lipases. An enrichment culture technique was used to enrich for thermophiles capable of utilizing olive oil as a carbon source. Out of 44 initial isolates, strain H1, which exhibits the highest lipase activity, was chosen for further characterization. Strain Hf was a spore forming rod, capable of growing at 65 degrees C and was assigned as a Bacillus sp. Optimal lipase production was on medium containing 1% Tween 80. Lipase H1 was partially purified by acetone precipitation, anion exchange chromatography and gelfiltration. The enzyme has a molecular weight of 20,000 (based on gel filtration) and is most active at pH 7.0 at 70 degrees C with a half-life of 50h at 60 degrees C. Lipase H1 had no apparent requirement for cofactors and its activity was completely inhibited in the presence of 1 mM HgCl2. The best substrates for the enzyme were short-chain fatty acid esters. With beta-naphthyl caprylate as a substrate, the enzyme has a K-m of 0.02 mM.