Lipase production by the mutant strain Rhizopus sp. BTNT-2 was optimized in submerged fermentation. Different chemical and physical parameters such as carbon sources, nitrogen sources, oils, inoculum level, pH, incubation time, incubation temperature and aeration have been extensively studied to increase lipase productivity. Potato starch (1.25% w/v) as a carbon source, corn steep liquor (1.5% w/v) as a nitrogen source and olive oil (0.5% v/v) as lipid source were found to be optimal for lipase production. The optimal levels of other parameters are 4 ml of inoculum (2.6x10(8) spores/ml), initial pH of 5.5, incubation time of 48 hours, incubation temperature of 28 degrees C and aeration rate of 120 rpm. With the optimized parameters, the highest production of lipase was 59.2 U/ml while an yield of only 28.7 U/ml was obtained before optimization resulting in 206% increase in the productivity.