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Abstract In this study, two highly thermotolerant and methanol-tolerant lipase-producing bacteria were isolated from cooking oil and they exhibited a high number of catalytic lipase activities recording 18.65 ± 0.68 U/mL and 13.14 ± 0.03 U/mL, respectively. Bacterial isolates were identified according to phenotypic and genotypic 16S rRNA characterization as Kocuria flava ASU5 (MT919305) and Bacillus circulans ASU11 (MT919306). Lipases produced from Kocuria flava ASU5 showed the highest methanol tolerance, recording 98.4% relative activity as well as exhibited high thermostability and alkaline stability. Under the optimum conditions obtained from 3D plots of response surface methodology design, the Kocuria flava ASU5 biocatalyst exhibited an 83.08% yield of biodiesel at optimized reaction variables of, 60 ○C, pH value 8 and 1:2 oil/alcohol molar ratios in the reaction mixture. As well as, the obtained results showed the interactions of temperature/methanol were significant effects, whereas this was not noted in the case of temperature/pH and pH/methanol interactions. The obtained amount of biodiesel from cooking oil was 83.08%, which was analyzed by a GC/Ms profile. The produced biodiesel was confirmed by Fourier-transform infrared spectroscopy (FTIR) approaches showing an absorption band at 1743 cm−1, which is recognized for its absorption in the carbonyl group (C=O) which is characteristic of ester absorption. The energy content generated from biodiesel synthesized was estimated as 12,628.5 kJ/mol. Consequently, Kocuria flava MT919305 may provide promising thermostable, methanol-tolerant lipases, which may improve the economic feasibility and biotechnology of enzyme biocatalysis in the synthesis of value-added green chemicals.