Lipases occupy a prominent place among biocatalysts and have a wide spectrum of biotechnological applications. Lipases are unique as they hydrolyse fats into fatty acids and glycerol at the water-lipid interface and can reverse the reaction in non-aqueous media. The stability of these enzymes in organic solvents have pushed them into the frontier areas of organic synthesis leading to the designing of novel drugs, surfactants, bioactive compounds and oleochemicals. In addition, lipase-catalysed trans-esterification and inter-esterification reactions have been exploited in the fat industry. Looking into the wide scenario of lipase applications, commercialization of lipase production is a prime area of interest for microbiologists, process engineers and biochemists. Research carried out in this field has revealed that microbes, especially fungi and bacteria, are the tools of choice for commercial production. Recently, the structure determination of a few microbial lipases has widened our knowledge about the unique mechanism of catalysis of this enzyme.