This study assesses the potential for the lipid production by the oleaginous yeast Cystobasidium oligophagum JRC1 using dairy industry waste cheese whey as a substrate. Cheese whey was used either untreated (UCW) or deproteinized (DCW) at different concentrations (25–100%) to serve as the carbon and energy source. Both UCW and DCW supported high biomass and lipid productivities. The biomass productivity of 0.076 ± 0.0004 and 0.124 ± 0.0021 g/L h, lipid productivity of 0.0335 ± 0.0004 and 0.0272 ± 0.0008 g/L h, and the lipid content of 44.12 ± 0.84 and 21.79 ± 1.00% were achieved for 100% DCW and UCW, respectively. The soluble chemical oxygen demand (sCOD) removal rate was 8.049 ± 0.198 and 10.61 ± 0.0165 g/L day (84.91 ± 0.155 and 86.82 ± 0.067% removal) for 100% DCW and UCW, respectively. Fatty acid methyl ester (FAME) composition obtained using GC-FID studies revealed the presence of C16 and C18 fatty acid in the lipid extract and the biodiesel properties were found to be in accordance with ASTM and EN standards. The study presents a method for the valorization of cheese whey waste into a feasible feedstock for biodiesel. © 2019, King Abdulaziz City for Science and Technology.