Two strategies of converting industrial wastes to microbial lipid and direct transesterification of obtained lipid into biodiesel were attempted. Several oleaginous yeasts were cultivated on industrial wastes. The yeasts grew well on the wastes with low C/N ratio (i.e. serum latex) but accumulated high lipid content only when the wastes had a high C/N ratio (i.e. palm oil mill effluent and crude glycerol). The yeast lipids have similar fatty acid composition to that of plant oil indicating their potential use as biodiesel feed-stocks. The combination of these wastes and two-phase cultivation for cell growth and lipid accumulation improved lipid productivity of the selected yeast. The direct transesterification process that eliminates cell drying and lipid extraction steps, gave comparable yield of biodiesel (fatty acid methyl ester >70% within 1 h) to that of conventional method. These two successful strategies may contribute greatly to industrializing oil production from microbes and industrial wastes. (C) 2013 Elsevier Ltd. All rights reserved.