A CO2 sequestering bacterial strain, Serratia sp. ISTD04, that produces a significant amount of extracellular lipids was isolated from marble mine rocks. C-14 labeling analysis revealed that the rate of assimilation of CO2 by the strain is 0.756 x 10 (9) mu mol CO2 fixed cell (1) h (1). It was found to produce 466 mg/l of extracellular lipid which was characterized using H-1 NMR. After transesterification of lipids, the total saturated and unsaturated FAME was found to be 51% and 49% respectively. The major FAME contained in the biodiesel were palmitic acid methyl ester (C16:0), oleic acid methyl ester (C18:1) and 10-nonadecenoic acid methyl ester (C19:1). Biodiesel produced by Serratia sp. ISTD04 is balanced in terms of FAME composition of good quality. It also contained higher proportion of oleic acid (35%) which makes it suitable for utilization in existing engines. Thus, the strain can be harnessed commercially to sequester CO2 into biodiesel. (C) 2014 Elsevier Ltd. All rights reserved.