Case insensitive sub-string search
Both arguments should be const char*. It's a search, it shouldn't be able to change str by accident.

Let's have a look at its use, though. Does it really work like strstr?

puts(istrstr("example", "please")); // prints "ple"


istrstr's behaviour completely differs from strstr. The latter will return NULL when the second string isn't completely in the first one. istrstr's name is therefore misleading and should be called istringoverlap or similar.

Unless you're going for performance, I suggest you to go for simplicity and write an additional helper:

/** @brief checks whether @a prefix is a prefix of @a str.
 *
 * @param str    a null-terminated string
 * @param prefix a null-terminated string
 * @returns 1 if @a prefix is a prefix of @a str
 * @returns 0 otherwise
 *
 * The check is case-insensitive.
 *
 * This function yields undefined behavior if tolower() yields undefined 
 * behavior for any character in either str or prefix. If @a str
 * or @a prefix is not a null-terminated string, the behavior will be
 * undefined.
*/
int is_iprefix(const char * str, const char * prefix) {
    while(*str &amp;&amp; *prefix) {
        if(tolower(*str) != tolower(*prefix)) {
            return 0;
        }
        prefix++;
        str++;
    }
    return (*prefix == '\0');
}


Why would I recommend to write another function? With only seven lines it's easy to check whether we got that right. We can re-use this function if we want to, and we can use it as a building block for our now istrstr variant:

const char * istrstr(const char * str, const char * substr) {
    while(*str) {
        if(is_iprefix(str,substr)) {
            return str;
        } else {            /* not really necessary, since return exits */
            str++;
        }    
    }
    return NULL;
}


However, that's not going for maximum performance. If we're really interested in more performance, we have to stop as soon as str is shorter than substr. We can either use strlen and count down, e.g.

const char * istrstr(const char * str, const char * substr) {
    int diff = strlen(str) - strlen(substr);
    while(*str &amp;&amp; diff-- &gt;= 0) {
        if(is_iprefix(str,substr)) {
            return str;
        } else {
            str++;
        }    
    }
    return NULL;
}


or we can inline is_iprefix and check whether str runs out of characters, but that's left as an exercise. Your code is almost there, by the way, you just need to fix the aforementioned bug.