BACKGROUND Vegetable oil refinery wastewater (VORW) is an environmental pollutant in less developed countries which annually produce 75% of vegetable oils worldwide. Microbial oils from low-cost substrates are of growing importance for the production of renewable biofuel feedstocks, and food and feed supplements. In the current study, VORW was used as a cheap substrate to produce added-value compounds including lipase, microbial oil and lipid-rich biomass using Yarrowia lipolytica. The chemical oxygen demand (COD) reduction of the wastewater was studied after fermentation. RESULTS The maximum microbial oil concentration and lipase activity were 2.68 g L-1 and 8 U mL(-1) after 48 h of inoculation. The microbial oil production increased from 2.86 g L-1 to 7.74 g L-1 after optimization by response surface methodology. Using optimized medium, 11 g L-1 microbial oil and 18.3 g L-1 biomass were obtained in the bioreactor culture. The amount of unsaturated fatty acids (FAs) reached <= 63% in the resulting microbial oil with a suitable FA profile for the production of lipid-rich biomass. The biomass of Y. lipolytica has 60% lipid content and a significant amount of essential FAs which makes it as a proper feed supplement. The COD level of the wastewater decreased by 80% after 20 h. CONCLUSION VORW can be used as a promising substrate for the sustainable production of microbial oil and lipid-rich biomass with useful FAs by Y. lipolytica. This process also can simultaneously reduce environmental pollution of wastewater in a safe and eco-friendly way. (c) 2019 Society of Chemical Industry