A novel tri-substrate fermentation (TSF) process was developed for the production of lipase from Aspergillus niger MTCC 2594 using agro-industrial residues, wheat bran (WB), coconut oil cake (COC) and an agro-product, wheat rawa (WR). The lipase activity was 628.7 +/- 13 U/g dry substrate (U/gds) at 30 degrees C and 96 h and growth studies indicated that addition of WR significantly augmented the biomass and lipase production. Scale up of lipase production at 100 g and 3 kg (3 x 1 kg) tray-level batch fermentation resulted in 96% and 83.0% of enzyme activities, respectively, at 72 h. Maximum activity of 745.7 +/- 11 U/gds was obtained, when fermented substrate was extracted in buffer containing 1% (w/v) sodium chloride and 0.5% (w/v) Triton X-100. Furthermore, the direct application of fermented substrate for tallow hydrolysis makes the process economical for industrial production of biofuel. (C) 2010 Elsevier Ltd. All rights reserved.