A whole-cell based solvent-free system was developed for efficient conversion of waste grease to biodiesel via one-pot esterification and transesterification. By isolation and screening of lipase-producing strains from soil, Serratia marcescens YXJ-1002 was discovered for the biotransformation of grease to biodiesel. The lipase (SML) from this strain was cloned and expressed in Escherichia coli as an intracellular enzyme, showing 6 times higher whole-cell based hydrolysis activity than that of wild type strain. The recombinant cells were used for biodiesel production from waste grease in one-pot reactions containing no solvent with the addition of methanol in several small portions, and 97% yield of biodiesel (FAME) was achieved under optimized conditions. In addition, the whole-cell biocatalysts showed excellent reusability, retaining 74% productivity after 4 cycles. The developed system, biocatalyst, and process enable the efficient, low-cost, and green production of biodiesel from waste grease, providing with a potential industrial application. (C) 2012 Elsevier Ltd. All rights reserved.