In this study, a newly isolated oleaginous fungus, Mucor circinelloides (M. circinelloides) Q531, was able to convert mulberry branches into lipids. The highest yield and the maximum lipid content produced by the fungal cells were 42.43 ± 4.01 mg per gram dry substrate (gds) and 28.8 ± 2.85%, respectively. The main components of lignocellulosic biomass were gradually reduced during solid-state fermentation (SSF). Cellulose, hemicellulose and lignin were decreased from 45.11, 31.39 and 17.36% to 41.48, 28.71, and 15.1%, respectively. Gas chromatography analysis showed that the major compositions of the fermented products were palmitic acid (C16:0, 18.42%), palmitoleic acid (C16:1, 5.56%), stearic acid (C18:0, 5.87%), oleic acid (C18:1, 33.89%), linoleic acid (C18:2, 14.45%) and γ-linolenic acid (C18:3 n6, 22.53%) after 2 days of SSF. The fatty acid methyl esters contained unsaturated fatty acids with a ratio of 75.95%. The composition and content obtained in this study are more advantageous than those of many other biomass lipids. Meanwhile, the oleaginous fungus had a high cellulase activity of 1.39 ± 0.09 FPU gds−1. The results indicate that the enzyme activity of the isolated fungus was capable of converting the cellulose and hemicelluloses to available sugar monomers which are beneficial for the production of lipids.