Lipases (triacylglycerolacyl hydrolases, EC3.1.1.3) are class of enzymes which catalyze the hydrolysis of long-chain triglycerides. In this review paper, an overview regarding the fungal lipase production, purification, and application is discussed. The review describes various industrial applications of lipase in pulp and paper, food, detergent, and textile industries. Some important lipase-producing fungal genera include Aspergillus, Penicillium, Rhizopus, Candida, etc. Current fermentation process techniques such as batch, fed-batch, and continuous mode of lipase production in submerged and solid-state fermentations are discussed in details. The purification of lipase by hydrophobic interaction chromatography is also discussed. The development of mathematical models applied to lipase production is discussed with special emphasis on lipase engineering.