Microbial lipids produced from lignocellulose and crude glycerol (CG) can serve as sustainable alternatives to vegetable oils, whose production is, in many cases, accompanied by monocultures, land use changes or rain forest clearings. Our projects aim to understand the physiology of microbial lipid production by oleaginous yeasts, optimise the production and establish novel applications of microbial lipid compounds. We have established methods for fermentation and intracellular lipid quantification. Following the kinetics of lipid accumulation in different strains, we found high variability in lipid formation even between very closely related oleaginous yeast strains on both, wheat straw hydrolysate and CG. For example, on complete wheat straw hydrolysate, we saw that one Rhodotorula glutinis strain, when starting assimilating D‐xylosealso assimilated the accumulated lipids, while a Rhodotorula babjevae strain could accumulate lipids on D‐xylose. Two strains (Rhodotorula toruloides CBS 14 and R. glutinis CBS 3044) were found to be the best out of 27 tested to accumulate lipids on CG. Interestingly, the presence of hemicellulose hydrolysate stimulated glycerol assimilation in both strains. Apart from microbial oil, R. toruloides also produces carotenoids. The first attempts of extraction using the classical acetone‐based method showed that β‐carotene is the major carotenoid. However, there are indications that there are also substantial amounts of torulene and torularhodin, which have a very high potential as antioxidants.