The manufacture of enzymes, like L-asparaginase with less adverse effects in the treatment of cancer is an important facet of pharmaceutical industry. Yeast and Filamentous fungi are commonly reported in scientific literature to produce L-asparaginase with less adverse effects than prokaryotic microorganisms. In the present study Latin square design was used to examine the effect of L-proline, L-glutamic acid and Sodium nitrate as nitrogen sources on production of extracellular L-asparaginase by Aspergillus terreus MTCC 1782 in order to obtain the best nitrogen source in shake culture fermentation. The experimental values of L-asparaginase activity were subjected to statistical analysis and statistical significance of the nitrogen sources was studied for the Latin-Square Design using Dataplot software. It was found that L-proline as a best nitrogen source for the production of L-asparaginase by Aspergillus terreus MTCC 1782 for maximum L-asparaginase activity.