Inulinase consist of an important class of enzymes for the production of fructose and fructo-oligosaccharides, which are extensively used in pharmaceutical, food industry and beverages. Inulinase have also found their application for inulin substrates hydrolysis for single-cell oil and single-cell protein production. The isolated fungus was identified as Aspergillus niger. It has been isolated from numerous habitats. This enzyme is found in many plants species and is widely distributed in fungi, yeast and bacterial strains. In the present study; rhizosphere soil samples were collected and inoculated for the isolation of fungal species present in soil. A local fungal isolate identified as Aspergillus niger was tested for the optimization of inulinase production in solid state fermentation and submerged fermentation for various parameters such as pH, temperature, incubation time, carbon and nitrogen sources. Five different substrates wheat bran, banana peel, orange peel, sugarcane bagasse, garlic peel were used. Among five banana peel substrate resulted in maximum production of inulinase for incubation time in days. The inulinase production using banana peel as substrate was higher in submerged fermentation (61 U/ml) than solid state fermentation (52 U/ml). The optimum pH and temperature was found to be 5.4 and 37°C respectively. In submerged fermentation inulinase showed higher activity when inulin (72 U/ml) with respect to sucrose (67 U/ml) was used as carbon sources. Yeast extract showed higher activity in submerged fermentation (66 U/ml) was used as nitrogen sources.