NaOH-impregnation with catalyst steam explosion was found to be an efficient pretreatment method for oil palm empty fruit bunch (OPEFB) as a substrate for oil production by Naganishia cerealis IN1S2.5. Cellulase hydrolysis of the pretreated OPEFB yielded glucose at 0.364 g/g. Investigation of N. cerealis IN1S2.5 oil production in the OPEFB hydrolysate revealed a maximum oil yield (2.46 g/L) when the C/P molar ratio of the OPEFB hydrolysate was adjusted to 25.71, supplemented with Ca2+ and Zn2+, and set to pH 4. The N. cerealis IN1S2.5 oil was comprised of oleic (37.6%), palmitic (36.2%), and steric (17.9%) acids, all (w/w), as the major fatty acids. Predicted properties of the produced biodiesel indicated the potential of N. cerealis IN1S2.5 oil as a biodiesel feedstock.