Addition of lard or sodium oleate to the medium used for lipase production by Pseudomonas fragi resulted in a decreased accumulation of lipase in the culture supernatant fluid without affecting cell growth. The production and activity of lipase was inhibited by lard, sodium oleate, and the salts of other unsaturated fatty acids. Some divalent cations, Tweens, lecithin, and bovine serum prevented oleate inhibition, but did not reverse it. Similar inhibitory actions were observed with Geotrichum candidum lipase, but not with a staphylococcal lipase or pancreatic lipase. A protective effect by protein in crude enzyme preparations is indicated. The ability of oleate to lower surface tension does not appear to be related to its ability to inhibit lipase.