Crude glycerol, a by-product of biodiesel plants, was used as the sole carbon source for concomitant production of lipids and carotenoids by oleaginous red yeast Rhodotorula glutinis TISTR 5159. The addition of ammonium sulfate as a nitrogen source and Tween 20 as a surfactant increased the accumulation of lipids and carotenoids. Among the factors investigated using response surface methodology, the C/N ratio contributed a significant effect on biomass, lipid content and production of carotenoids. The synergic effects of the C/N ratio with glycerol concentration and Tween 20 concentration were observed in the accumulation of lipids. The optimum condition for biomass was glycerol concentration of 8.5% and C/N ratio of 60, while that for lipid content and carotenoids production was glycerol concentration of 9.5% and C/N ratio of 85. The production of lipids and carotenoids were further improved in a stirred tank bioreactor with pH controlled at 6.0 and aeration rate at 2 vvm. In fed-batch fermentation, the highest lipids production of 6.05 g/L with a cellular lipid content of 60.7% and carotenoids production of 135.25 mg/L were obtained. The yeast lipids obtained have shown the favorable properties for being used as feedstock in the production of biodiesel. (C) 2010 Elsevier Ltd. All rights reserved.