Cyanobacteria have immense prospective as a platform for renewable energy; however, a major barrier in achieving optimal productivity is the low lipid yield. Fremyella diplosiphon, a model cyanobacterium, is an ideal biofuel agent due to its desirable fatty acid methyl esters (FAMEs). To enhance lipid content, we overexpressed the sterol desaturase (SD) gene in F. diplosiphon B481 wild type by genetic transformation. This effort resulted in a transformant (B481-SD) with a 64-fold increase in the SD gene at the mRNA transcript level, with no loss in growth and pigmentation. The transformant was persistently grown for over 32 generations indicating long-term stability and vitality. We observed 27.3% and 23% increases in total lipid content and unsaturated FAMEs respectively in B481-SD transesterified lipids with methyl octadecadienoate as the most abundant unsaturated component. In addition, we detected an 81% increase in FAME composition in the transformant compared with the wild type. Theoretical physical and chemical properties confirmed a FAME profile with very high cetane number (65.972-67.494) and oxidative stability (50.493-18.66 h) in the engineered strain. Results of the study offer a promising approach to augment F. diplosiphon total lipid content and unsaturated FAMEs, thus paving the way to enhance biofuel capacity of the organism.