Aim To improve biosurfactant production economics by the utilization of potential low-cost materials. Methods and Results In an attempt to utilize cost-effective carbon sources in the fermentative production of biosurfactants, various pure and waste frying oils were screened by a standard biosurfactant producing strain. Considering the regional significance, easy availability and the economical advantages, waste frying coconut oil was selected as the substrate for further studies. On isolation of more competent strains that could use waste frying coconut oil efficiently as a carbon source, six bacterial strains were isolated on cetyltrimethyl ammonium bromidemethylene blue agar plate, from a soil sample collected from the premises of a coconut oil mill. Among these, Pseudomonas aeruginosa D was selected as the potential producer of rhamnolipid. Spectrophotometric method, TLC, methylene blue active substance assay, drop collapse technique, surface tension measurement by Du Nouy ring method and emulsifying test confirmed the rhamnolipid producing ability of the selected strain and various process parameters were optimized for the production of maximum amount of biosurfactant. Rhamnolipid components purified and separated by ethyl acetate extraction, preparative silica gel column chromatography, HPLC and TLC were characterized by fast atom bombardment mass spectrometry as a mixture of dirhamnolipids and monorhamnolipids. The rhamnolipid homologues detected were Rha-Rha-C10-C10, Rha-C12-C10 and Rha-C10-C8/Rha-C8-C10. Conclusion These results indicated the possibility of waste frying coconut oil to be used as a very effective alternate substrate for the economic production of rhamnolipid by a newly isolated Ps. aeruginosa D. Significance and Impact of the Study Results of this study throws light on the alternate use of already used cooking oil as high-energy source for producing a high value product like rhamnolipid. This would provide options for the food industry other than the recycling and reuse of waste frying oils in cooking and also furthering the value of oil nuts.