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This study focuses on the use of synthetic and low cost carbon sources for enhanced biomass and lipid production from oleaginous yeast strains using batch and fed batch fermentation. Five strains were selected out of 20 strains which were all isolated from various habitats, on the basis of lipid accumulating potential using Sudan B black dye. The selected isolates were characterized and their lipid production was optimized by batch cultivation in waste extract. Gas chromatography analysis revealed that lipids from all isolated yeast strains contained mainly long-chain fatty acids such as oleic acid, palmitic acid, stearic acid and linoleic acid. On the basis of lipid profile and production, two most suitable oleaginous yeast strains were selected for further experiments, i.e. fed batch fermentation using glucose (control) and sugarcane molasses as feed. Using glucose as feed, 38.8 ± 0.9 g/L and 29.4 ± 0.2 g/L biomass dry cell weight (DCW) and total lipids were produced respectively, whereas with sugarcane molasses feed, 50 ± 1 g/L (DCW) biomass and 39.2 ± 0.6 g/L lipids were produced by Rhodosporidium toruloides ATCC204091. After transesterification the lipid profile was analyzed by GC–MS revealing suitability for use as a potential feedstock for biodiesel production. [ABSTRACT FROM AUTHOR]