A gene encoding extracellular lipase was cloned and characterized from metagenomic DNA extracted from hot spring soil. The recombinant gene was expressed in E. coli and expressed protein was purified to homogeneity using hydrophobic interactions chromatography. The mature polypeptide consists of 388 amino acids with apparent molecular weight of 43 kDa. The enzyme displayed maximum activity at 50 °C and pH 9.0. It showed thermal stability up to 40 °C without any loss of enzyme activity. Nearly 80% enzyme activity was retained at 50 °C even after incubation for 75 min. However above 50 °C the enzyme displayed thermal instability. The half life of the enzyme was determined to be 5 min at 60 °C. Interestingly the CD spectroscopic study carried out in the temperature range of 25-95 °C revealed distortion in solution structure above 35 °C. However the intrinsic tryptophan fluorescence spectroscopic study revealed that even with the loss of secondary structure at 35 °C and above the tertiary structure was retained. With p-nitrophenyl laurate as a substrate, the enzyme exhibited a K ( m ), V ( max ) and K ( cat ) of 0.73 ± 0.18 μM, 239 ± 16 μmol/ml/min and 569 s(-1) respectively. Enzyme activity was strongly inhibited by CuCl(2), HgCl(2) and DEPC but not by PMSF, eserine and SDS. The protein retained significant activity (~70%) with Triton X-100. The enzyme displayed 100% activity in presence of 30% n-Hexane and acetone.