Whey, a by-product of the dairy industry, acts as a prime source of environmental pollution due to its high organic load. Its utilization as a substrate for lipase production is an attractive option in facing the challenge associated with whey disposal. However, there are only very few studies that have reported the production of lipase using whey. In this study, 43 bacterial strains were isolated from dairy industry soil sample, of which, 26 were found to produce lipase. Since whey contains lactose as the sole carbon source, the ability of the isolates to utilize this sugar was tested and two of the isolates B3 and B10 were positive for growth in phenol red lactose broth. When they were cultured by submerged fermentation and their lipase activities quantified, strain B10 displayed 0.79U/ml of activity. In order to improve the production of lipase, one-factor-at-a-time method was used to study the impacts of oil inducers, nitrogen sources, mineral salts and whey concentration on the process. Statistical optimization was performed using the Box-Behnken design of Response Surface Methodology (RSM). From this design, 75% whey, 4% (v/v) sunflower oil, 0.625% (w/v) beef extract and 0.2% (w/v) CaCl2 were inferred to be the optimal conditions that resulted in a maximum lipase activity of 0.954U/ml. Analysis of variance indicated statistical significance of the model. Lipase being an industrially sought-after enzyme owing to its unique properties, this cost-effective route to its production from a waste substrate holds paramount environmental and economic significance.