A total of 70 fungi were isolated from 21 sources of soil samples and oil plants by serial dilution method, using PDA plate and screened for lipolytic potential by employing agar plate method, using BYPO medium supplemented with palm oil and Rhodamine B. To determine lipase activity, thirty-eight lipase-producing isolates were cultured in liquid medium using palm oil as inducer. The results showed that Fusarium solani (NAN103) exhibited the highest specific activity, 87.73 ±0.99 U/mg. Therefore NAN103 were subjected to induced mutation for enhancing lipase activity. Single spore selection was separated single colony. A total of 12 fungal spore suspension were isolated and NS4 was the best single spore selectant that showed the specific activity 132.64 ±7.68 U/mg. Hence, NS4 was induced mutation by ultraviolet irradiation and mutagenic inducer, NTG, respectively. From UV inducing for mutation experiment, UV2002 which was the best mutant of 27 fungal isolates had the specific activity, approximately 230.80 ±17.65 U/mg. UV2002 was subsequently for induced mutation by NTG. The result illustrated that NTG022 from 14 fungal isolates was the most stable and yielded highest specific activity, 93.14 ±8.33 U/mg. Thus Finally, crude enzyme from NAN103 including 12 natural selected isolates, 27 UV induced mutant isolates and 14 NTG induced mutant isolates were the enzyme-catalysed transesterification for methyl ester production. The results showed that all through enzyme solution form NAN103 isolates were capable of catalysis for production. In addition, the enzyme produced by NAN103 were immobilized on dolomite and diatomaceous earth experimented for optimal condition of methyl ester production.The results indicated that water was essential for enzyme-mediated methyl ester synthesis by transesterification reaction.