Lipase producing halo tolerant Bacillus sp. VITL8 was isolated from oil contaminated areas of Vellore. The identity of the organism was established by 16S rDNA sequence, in addition to the morphological and biochemical characterization. The purified enzyme (22kDa, 8680U/mg) exhibited optimal activity at pH 7.0 and 40°C and retained more than 50% of its activity in the NaCl concentration range of 0-3.0M, pH 6.0-10.0 and 10-60°C. Secondary structure analysis, using circular dichroism, revealed that the enzyme is composed of 38% α-helix and 29% β-turns. The lipase activity significantly increased in the presence of (1mM) Mn(2+) (139%), Ca(2+) (134%) and Mg(2+) (130%). Organic solvents such as butanol and acetonitrile (25%, v/v) enhanced the activity whereas DMSO (25% v/v) retained the activity. The Km of enzyme-p-Nitrophenyl palmitate complex was determined to be 191μM with a Vmax of 68μM/mg/min. Though halotolerant Bacillus sp. has been explored for hydrocarbon degradation, to our knowledge this is the first report on the lipase activity of the isolate. The characteristics of the enzyme presented in this report, imply broader operational range of the enzyme and therefore could be suitable for many of the industrial chemical processes.