In view of ever-growing demand of biodiesel, there is an urgent need to look for inexpensive and promising renewable raw material oils for its production. In this context, the aim of this study was to evaluate the potential use of industrial wastes for low-cost production of oils through microbial fermentation. Among the strains tested, Yarrowia lipolytica grew best and produced highest lipid when grown on decanter effluent from palm oil mill. When crude glycerol by-product from a biodiesel plant was added into the effluent as a co-substrate, Y. lipolytica produced a higher biomass of 3.21 g/L and a higher amount of lipid of 2.21 g/L which was 68 % of the dry weight. The scale up and process improvement in a 5-L bioreactor increased the biomass and lipid up to 5.53 and 2.81 g/L, respectively. A semi-continuous mode of operation was an effective mode for biomass enhancement while a fed-batch mode was effective for lipid enhancement. These yeast lipids have potential to be used as biodiesel feedstocks because of their similar fatty acid composition to that of plant oil.