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A lipase producing Pseudomonas sp. is isolated from soil and sewage waste water in Hyderabad. The growth curve of Pseudomonas aeruginosa on growth medium is plotted. It is capable of producing the enzyme lipase where the specific enzyme activity is maximum. The optimum hydrolysis conditions for lipase are pH 7.0 to 9.0 and temperature at 450 C. These results show that Pseudomonas aeruginosa may have potential for industrial sewage waste water treatment and recycling of sewage wastes from the environment.