Background: Lipases are used in detergent industries to minimise the use of phosphate-based chemicals in detergent formulations. The use of lipase in household laundry reduces environmental pollution and enhances the ability of detergent to remove tough oil or grease stains. Results: A lipase-producing indigenous Bacillus subtilis strain [accession no. KT985358] was isolated from the foothills of Trikuta mountain in Jammu and Kashmir, India. The lipase (BSK-L) produced by this strain expressed alkali and thermotolerance. Lipase has an optimal activity at pH 8.0 and temperature 37°C, whereas it is stable at pH 6.0–9.0 and showed active lipolytic activity at temperatures 30 to 60°C. Furthermore, lipase activity was found to be stimulated in the presence of the metal ions Mn2+, K+, Zn2+, Fe2+ and Ca2+. This lipase was resistant to surfactants, oxidising agents and commercial detergents, suggesting it as a potential candidate for detergent formulation. BSK-L displayed noticeable capability to remove oil stains when used in different washing solutions containing buffer, lipase and commercial detergent. The maximum olive oil removal percentage obtained was 68% when the optimum detergent concentration (Fena) was 0.3%. The oil removal percentage from olive oil-soiled cotton fabric increased with 40 U/mL of lipase. Conclusions: This BSK-L enzyme has the potential for removing oil stains by developing a pre-soaked solution for detergent formulation and was compatible with surfactants, oxidising agents and commercial detergents