The aim of present work was to effectively remediate grease waste by Penicillium chrysogenum. For efficient degradation, grease waste was pre-treated using various lipases, among them lipolase was the best. The pretreated grease was used as a substrate by P. chrysogenum resulting into the production of fatty acids. Process was optimized by response surface methodology (RSM) using four variables viz; FeCl2 (mM), spore concentration (spores/ml), time period (days) and amount of grease (g). The optimized conditions viz; FeCl2 1.25 mM, culture amount 5 x 10(11) spores/ml and time period 16 days led to the production of 6.6 mg/g fatty acid from 10.0 g of pre-treated grease mixed with 5.0 g wheat bran in 10.0 ml czapek-dox medium under solid state fermentation. The fermented media was extracted with hexane and subjected to GCMS analysis, which showed the presence of higher amount of palmitic acid. It was purified by crystallization method and 2.8 g of palmitic acid was recovered from 1.0 kg grease waste in tray fermentation. (C) 2016 Elsevier Ltd. All rights reserved.