This SBIR Phase I project will develop the feasibility of continuously producing biodiesel fuel from renewable lipids that are harvested from oleaginous yeasts. Specifically, the plan is to maximize lipid production from selected yeast strains. This project investigates an innovative process that produces transportation grade biodiesel fuel from a novel microbial bioenergy source. It will demonstrate the feasibility of continuously producing biodiesel from renewable lipids harvested from oleaginous yeasts. The yeast strains will be carefully selected through a well designed screening process and culturing conditions will be extensively tested to maximize lipid production. Continuous biodiesel production is possible by utilizing the nonconventional Mcgyan process. The broader/commercial impact of the project will be to improve the science of producing biodiesel from non-food based, cellulosic fermentable sugars which are derived from corn stover, various types of straw, hay, wood chips, saw dust, switch grass, etc.