The aim of this study was to improve the production of an extracellular alkaline lipase from Alcaligenes sp. (ATCC 31371) by optimization of the culture medium, for economic production of biodiesel from waste vegetable oil. A number of carbon sources including different types of starch, sugar, sugar alcohol, organic acids, and surfactants were investigated. Polyoxyethylene (20) sorbitan tristearate, whose side chain is stearic acid, was the most effective carbon source for lipase production. Box-Behnken experimental design was used for three factors (soy protein, sodium nitrate, and stearic acid) and the optimal composition for maximum lipase production (1.7-fold enhancement) was established as soy protein 4.07%, sodium nitrate 0.17%, and stearic acid 0.28% at $28^{circ}C$ with an agitation rate of 220 rpm for 24 h. The enzyme was purified to homogeneity and the recovery of the lipase activity was 7.8% with a 30-fold purification. The estimated molecular size of the protein determined by SDS-PAGE was 33 kDa. The optimum pH and temperature of the purified lipase was 8.5 and $40^{circ}C$, respectively. The purified enzyme was stable in the pH range of 6.0 and 9.5 and in the temperature range of 20 and $50^{circ}C$.