In order to find a more effective way to obtain docosahexaenoic acid (DHA) rich lipid from Schizochytrium sp., a widespread propionate wastewater (PW) is used. PW is a common industrial and domestic wastewater, and transforming it into valuable products is a potential treatment method. Schizochytrium sp. is a rapidly growing oleaginous organism, which has been used commercially for DHA production. Herein, PW is completely used for DHA production by Schizochytrium sp. by genetic engineering and fermentation optimization, which can alleviate the increasingly tense demand for water resources and environmental pollution caused by industrial wastewater. Firstly, the methylmalonyl‐CoA mutase (MCM) was overexpressed in Schizochytrium sp. to enhance the metabolism of propionate, then the engineered strain of overexpressed MCM (OMCM) can effectively use propionate. Then, the effects of PW with different concentration of propionate were investigated, and results showed that OMCM can completely replace clean water with PW containing 5 g L−1 propionate. Furthermore, in the fed‐batch fermentation, the OMCM obtained the highest biomass of 113.4 g L−1 and lipid yield of 64.4 g L−1 in PW condition, which is 26.8% and 51.7% higher than that of wild type (WT) in PW condition. Moreover, to verify why overexpression of MCM can promote DHA and lipid accumulation, the comparative metabolomics, ATP production level, the antioxidant system, and the transcription of key genes were investigated. Results showed that ATP induced by PW condition could drive the synthesis of DHA, and remarkably improve the antioxidant capacity of cells by enhancing the carotenoids production. Therefore, PW can be used as an effective and economical substrate and water source for Schizochytrium sp. to accumulate biomass and DHA.