In this study, an organic solvent tolerant bacterial strain was isolated. This strain was identified as Pseudomonas sp. strain S5, and was shown to degrade BTEX (Benzene, Toluene, Ethyl-Benzene, and Xylene). Strain S5 generates an organic solvent-tolerant lipase in the late logarithmic phase of growth. Maximum lipase production was exhibited when peptone was utilized as the sole nitrogen source. Addition of any of the selected carbon sources to the medium resulted in a significant reduction of enzyme production. Lower lipase generation was noted when an inorganic nitrogen source was used as the sole nitrogen source. This bacterium hydrolyzed all tested triglycerides and the highest levels of production were observed when olive oil was used as a natural triglyceride. Basal medium containing Tween 60 enhanced lipase production to the most significant degree. The absence of magnesium ions (Mg2+) in the basal medium was also shown to stimulate lipase production. Meanwhile, an alkaline earth metal ion, Na+, was found to stimulate the production of S5 lipase.