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Rhodotorula kratochvilovae(syn, Rhodosporidium kratochvilovae) SY89, an oleaginous yeast, isolated from Ethiopian soil, was grown under nitrogen-limited media. The capacity this with respect to biomass production, lipid yield and lipid content was evaluated. The influence of inoculum size, carbon sources, variations in glucose concentration, nitrogen sources, C/Nratio, pH, temperature, agitation, and aeration rate and incubation period were investigated. Inoculum size of 10% v/v, glucose as a carbon source at 50 g/L glucose, 0.50 g/L yeast extract and 0.31 g/L (NH4)2SO4, C/Nratio of 120, pH 5.5, incubation temperature of 30 °C, 225 rpm, 0.2 as aeration ratio and 144 h of incubation were found to be optimum conditions for lipid production. Then the yeast was grown in a batch bioreactor by combining the different optimized parameters together. Under the optimized conditions, the yeast gave maximum biomass (15.34 ± 1.47 g/L), lipid yield (8.60 ± 0.81 g/L) and lipid content (56.06 ± 1.70%). The dominant fatty acids exhibited in order of their relative abundance (%w/w), were oleic, palmitic, linoleic, stearic, linolenic and palmitoleic acids. The concentration of saturated and monounsaturated fatty acids adds up 78.63 ± 2.19%. This suggests that this strain could be used as a good feedstock for biodiesel production.