BACKGROUNDEfficient conversion of inhibitor containing pentose rich stream into bioethanol or biogas is still challenging due to several technological challenges; however, this stream can be efficiently assimilated into lipids by oleaginous yeasts such as Rhodotorula. In this work, a continuous and nonsterile process was developed for bioconversion of waste streams into lipids for biodiesel using growth-inhibitor-tolerant oleaginous yeast. RESULTSAn inhibitor-tolerating property of the strain was used to develop a cyclic and continuous near axenic cultivation process in a 2L nonsterile bioreactor to enhance valorization of waste streams and to reduce energy requirements for media and vessel sterilization. After media optimization, continuous cultivation resulted in significant increase in biomass (14.90 gL(-1)day(-1)) and lipid productivity (6.15gL(-1)day(-1)) as compared to flask (biomass approximate to 3gL(-1)day(-1) and lipid productivity approximate to 0.6gL(-1)day(-1)) results. Palmitic acid (C16:0) and oleic acid (C18:1) were the major fatty acids, accounting for almost 80% of total lipids, thus making lipid produced in the process suitable for biodiesel production. CONCLUSIONInhibitors present in waste streams successfully maintained near axenic conditions during the cultivation. Maximum dilution rate of 1 was achieved after media optimization, which resulted in complete valorization of nutrients into biomass and lipids with high productivity. (c) 2018 Society of Chemical Industry