In the quest for inexpensive feedstocks for the cost-effective production of liquid fuels, we have examined gaseous substrates that could be made available at low cost and sufficiently large scale for industrial fuel production. Here we introduce a new bioconversion scheme that effectively converts syngas, generated from gasification of coal, natural gas, or biomass, into lipids that can be used for biodiesel production. We present an integrated conversion method comprising a two-stage system. In the first stage, an anaerobic bioreactor converts mixtures of gases of CO 2 and CO or H 2 to acetic acid, using the anaerobic acetogen Moorella thermoacetica. The acetic acid product is fed as a substrate to a second bioreactor, where it is converted aerobically into lipids by an engineered oleaginous yeast, Yarrowia lipolytica. We first describe the process carried out in each reactor and then present an integrated system that produces microbial oil, using synthesis gas as input. The integrated continuous bench-scale reactor system produced 18 g/L of C16-C18 triacylglycerides directly from synthesis gas, with an overall productivity of 0.19 g·L −1 ·h −1 and a lipid content of 36%. Although suboptimal relative to the performance of the individual reactor components, the presented integrated system demonstrates the feasibility of substantial net fixation of carbon dioxide and conversion of gaseous feedstocks to lipids for biodiesel production. The system can be further optimized to approach the performance of its individual units so that it can be used for the economical conversion of waste gases from steel mills to valuable liquid fuels for transportation.two-stage bioprocess | lipid production | microbial fermentation | gas-to-liquid fuel | CO 2 fixation C oncerns over diminishing oil reserves and climate-changing greenhouse gas emissions have led to calls for clean and renewable liquid fuels (1). One promising direction has been the production of microbial oil from carbohydrate feedstocks. This oil can be readily converted to biodiesel and recently there has been significant progress in the engineering of oleaginous microbes for the production of lipids from sugars (2-5). A major problem with this approach has been the relatively high sugar feedstock cost. Alternatively, less costly industrial gases containing CO 2 with reducing agents, such as CO or H 2 , have been investigated. In one application, anaerobic Clostridia have been used to convert synthesis gas to ethanol (6), albeit at low concentration requiring high separation cost. Here we present an alternative gas-to-lipids approach that overcomes the drawbacks of previous schemes.We have shown previously that acetate in excess of 30 g/L can be produced from mixtures of CO 2 and CO/H 2 , using an evolved strain of the acetogen Moorella thermoacetica, with a substantial productivity of 0.55 g·L −1 ·h −1 and yield of 92% (7). We also have demonstrated that the engineering of the oleaginous yeast Yarrowia lipolytica can yield biocatalysts that can produce lipids from...