Microbial lipid produced using yeast fermentation with inexpensive carbon sources such as lignocellulosic hydrolyzate can be an alternative feedstock for biodiesel production. Several inhibitors that can be generated during acid hydrolysis of lignocellulose were added solely or together into the culture medium to study their individual inhibitory actions and their synergistic effects on the growth and lipid accumulation of oleaginous yeast Rhodosporidium toruloides. When the inhibitors were present in isolation in the medium, to obtain a high cell biomass accumulation, the concentrations of formic acid, acetic acid, furfural and vanillin should be lower than 2, 5, 0.5 and 1.5 g/L, respectively. However, the synergistic effects of these compounds could dramatically decrease the minimum critical inhibitory concentrations leading to significant growth and lipid production inhibitions. Unlike the above-cited inhibitors, sodium lignosulphonate had no negative influence on biomass accumulation when its concentration was in the range of 0.5-2.0 g/L; in effect, it was found to facilitate cell growth and sugar-to-lipid conversion. The fatty acid compositional profile of the yeast lipid was in the compositional range of various plant oils and animal tallow. Finally, the crude yeast lipid from bagasse hydrolyzate could be well converted into fatty acid methyl ester (FAME, biodiesel) by enzymatic transesterification in a tert-butanol system with biodiesel yield of 67.2% and lipid-to-biodiesel conversion of 88.4%.