Many different bacterial species produce lipases which hydrolyze esters of glycerol with preferably long-chain fatty acids. They act at the interface generated by a hydrophobic lipid substrate in a hydrophilic aqueous medium. A characteristic property of lipases is called interfacial activation, meaning a sharp increase in lipase activity observed when the substrate starts to form an emulsion, thereby presenting to the enzyme an interfacial area. As a consequence, the kinetics of a lipase reaction do not follow the classical Michaelis-Menten model. With only a few exceptions, bacterial lipases are able to completely hydrolyze a triacylglycerol substrate although a certain preference for primary ester bonds has been observed. Numerous lipase assay methods are available using coloured or fluorescent substrates which allow spectroscopic and fluorimetric detection of lipase activitiy. Another important assay is based on titration of fatty acids released from the substrate. Newly developed methods allow to exactly determine lipase activity via controlled surface pressure or by means of a computer-controlled oil drop tensiometer. The synthesis and secretion of lipases by bacteria is influenced by a variety of environmental factors like ions, carbon sources, or presence of non-metabolizable polysaccharides. The secretion pathway is known for Pseudomonas lipases with P. aeruginosa lipase using a two-step mechanism and P. fluorescens lipase using a one-step mechanism. Additionally, some Pseudomonas lipases need specific chaperone-like proteins assisting their correct folding in the periplasm. These lipase-specific foldases (Lif-proteins) which show a high degree of amino acid sequence homology among different Pseudomonas species are coded for by genes located immediately downstream the lipase structural genes. A comparison of different bacterial lipases on the basis of primary structure revealed only very limited sequence homology. However, determination of the three-dimensional structure of the P. glumae lipase indicated that at least some of the bacterial lipases will presumably reveal a conserved folding pattern called the α/β-hydrolase fold, which has been described for other microbial and human lipases. The catalytic site of lipases is buried inside the protein and contains a serine-protease-like catalytic triad consisting of the amino acids serine, histidine, and aspartate (or glutamate). The Ser-residue is located in a strictly conserved β-ε-Ser-α motif. The active site is covered by a lid-like α-helical structure which moves away upon contact of the lipase with its substrate, thereby exposing hydrophobic residues at the protein’s surface mediating the contact between protein and substrate. This movable lid-like α-helix explains at a molecular level the lipase-specific phenomenon of interfacial activation. At least some of the pathogenic bacterial species produce a lipase which has been studied with respect to its role as a virulence factor. Lipases of Propionibacterium acnes and Staphylococcus epidermidis may be involved in colonization and persistence of these bacteria on the human skin. Lipases of S. aureus and P. aeruginosa are produced during the bacterial infection process and, at least in vitro, considerably impair the function of different cell types involved in the human immune response like macrophages or platelets. The present state of knowledge suggests to classify the lipases as important bacterial virulence factors which exert their harmful effects in combination with other bacterial enzymes, in particular the phospholipases C. Most of the steadily increasing interest in bacterial lipases is based on their biotechnological applications which are partly based on their potential to catalyze not only hydrolysis but also synthesis of a variety of industrially valuable products. Optically active compounds, various esters and lactones are among the substances synthesized using bacterial lipases. Recently, an important application emerged with the addition of bacterial lipases to household detergents in order to reduce or even replace synthetic detergent chemicals which pose considerable environmental problems. As a main conclusion, [ipases represent an extremely versatile group of bacterial extracellular enzymes that are capable of performing a variety of important reactions, thereby presenting a fascinating field tot future research.