In the present study, Pleurotus ostreatus IBL-02, a white rot basidiomycete was exploited for lipase production in solid-state fermentation (SSF). Different agro-industrial wastes such as canola-oilseed cake, cotton-oilseed cake, linseed-oil cake, sesame-oilseed cake, rice bran and wheat bran were screened for fermentative production of the lipolytic enzyme. The enzyme profile of P. ostreatus showed the highest activity of lipase on canola oil seed cake as a substrate under SSF conditions. Various physiological factors such as incubation time, humidity level, culture pH, incubation temperature and supplementation of carbon and nitrogen sources were optimized to induce the lipase synthesis capability of P. ostreatus at an optimal level. Optimum lipase activity (3256 U/gram dry substrate) was measured in the solid fermentation medium using moisture level, 50.0%; pH, 4.0; temperature, 30°C and olive oil, 2.0% after 72 h of incubation period with glucose and urea as carbon and nitrogen supplements, respectively. Glucose supplementation significantly stimulated the lipase production, while nitrogen addition did not exert any significant effect on lipase yield. Overall, under optimized bioprocess conditions, the enzyme activity was improved up to 1.6 folds with respect to the original enzyme activities. The current findings indicate that culture conditions have great influence on the lipase production potential of P. ostreatus for commercial purpose.