Fossil fuel is limited but its usage has been growing rapidly, thus the fuel is predicted to be completely running out and causing an unbearable global energy crisis in the near future. To solve this potential crisis, incorporating with increasing environmental concerns, significant attentions have been given to biofuel production in the recent years. With the aim of isolating a microbial biocatalyst with potential application in the field of biofuel, a lipase from Streptomyces sp. CS628, LP28, was purified using hydroxyapatite column chromatography followed by a gel filtration. Molecular weight of LP28 was estimated to be 32,400 Da by SDS-PAGE. The activity was the highest at 30 °C and pH 8.0 and was stable at pH 6.0-8.0 and below 25 °C. The enzyme preferentially hydrolyzed p-nitrophenyl decanoate (C10), a medium chain substrate. Furthermore, LP28 non-specifically hydrolyzed triolein releasing both 1,2- and 1,3-diolein. More importantly, LP28 manifestly catalyzed biodiesel production using palm oil and methanol; therefore, it can be a potential candidate in the field of biofuel.