Fossil fuels are consumed so rapidly that it is expected that the planet resources will be soon exhausted. Therefore, it is imperative to develop alternative and inexpensive new technologies to produce sustainable fuels, for example biodiesel. In addition to hydrolytic and esterification reactions, lipases are capable of performing transesterification reactions useful for the production of biodiesel. However selection of the lipases capable of performing transesterification reactions is not easy and consequently very few biodiesel producing lipases are currently available. In this work we first isolated 1,016 lipolytic microorganisms by a qualitative plate assay. In a second step, lipolytic bacteria were analyzed using a colorimetric assay to detect the transesterification activity. Thirty of the initial lipolytic strains were selected for further characterization. Phylogenetic analysis revealed that 23 of the bacterial isolates were Gram negative and 7 were Gram positive, belonging to different clades. Biofuel production was analyzed and quantified by gas chromatography and revealed that 5 of the isolates produced biofuel with yields higher than 80% at benchtop scale. Chemical and viscosity analysis of the produced biofuel revealed that it differed from biodiesel. This bacterial-derived biofuel does not require any further downstream processing and it can be used directly in engines. The freeze-dried bacterial culture supernatants could be used at least five times for biofuel production without diminishing their activity. Therefore, these 5 isolates represent excellent candidates for testing biofuel production at industrial scale.