Soybean hull, generated from soybean processing, is a lignocellulosic material with limited industrial applications and little market value. This research is exploring a new application of soybean hull to be converted to fungal lipids for biodiesel production through solid-state fermentation. Mortierella isabellina was selected as the oil producer because of its high lipid content at low C/N ratio. Several cultivation factors were investigated, including moisture content, inoculums size, fungal spore age, and nutrient supplements, in an attempt to enhance the lipid production of the solid-state fermentation process. The results showed that lipid production with the increase of the moisture content and the spore age, while decreased as the size of inoculums increased. Nutrients addition (KH2PO4 1.2 mg and MgSO4 0.6 mg/g soybean hull) improved the lipid production. The total final lipid reached 47.9 mg lipid from 1 g soybean hull after the conversion, 3.3-fold higher than initial lipid reserve in the soybean hull. The fatty acid profile analysis indicated that fatty acid content consisted of 30.0% of total lipid, and 80.4% of total fatty acid was C16 and C18. Therefore, lipid production from soybean hull is a possible option to enable soybean hull as a new resource for biodiesel production and to enhance the overall oil production from soybeans.