Dextranase (α-1,6-D-glucan, 6-glucanohydrolase; E.C.188.8.131.52) is an enzyme which hydrolizes the α-1,6 glucosidic linkages in dextran, found in higher plants, mammalian tissues, fungi and bacteria. 17 fungal strains were screened for their ability to produce dextranase enzyme. Paecilomyces lilacinus was selected as the best fungal source to dextranase production among them. The production of dextranase from P. lilacinus was investigated and a number of factors affecting enzyme production, i.e. cultivation time, temperature, initial pH and rotation speed were optimized. Maximum dextranase production was obtained in 7 day cultures at 100 rpm. Optimum pH and temperature for dextranase production were pH: 6 and 30oC, respectively.