In the present investigation a Lipase producing strain, Bacillus subtilis (MTCC-121) was grown on various media containing different sources of carbon, nitrogen and other nutrients. The best media found for the production of lipase was M2 media containing 0.4% peptone, 0.2% beef extract and 1% NaCl. Lipase produced from this culture was used for the kinetic resolution of racemic acetyl-1-phenyl ethanol and its derivatives, which are important as chiral auxiliaries and intermediates in the synthesis of natural products, pharmaceuticals and agrochemicals. The lipase resolved these substrates after 48 h with enantiomeric excess of 90-98% and conversion 40-48%. (C) 2010 Society of Chemical Industry