Microbial oils are those that are produced by oil-accumulating microorganisms. Compared with oils extracted from soybean, corn, canola, and other crops, producing oils by microbes offers several advantages: 1) much less space, water, and labor required; 2) less affected by venue, season, and climate; 3) short life cycle; 4) not competing with human and animal foods; 5) easy to scale up; and 6) mature fermentation technology available. Hydrocarbons are the basic components of gasoline and diesel refined from petroleum. For the purpose of reducing our dependence on foreign oil, improving our environment and economy, and maintaining a sustainable development, biofuels are regarded as promising solutions. If we could produce hydrocarbons from renewable sources, then these hydrocarbons could be directly used as fuels and offer the potential for completely replacing petroleum. At the mean time, problems and challenges facing bioethanol and biodiesel would be unnecessary to address.           One yeast species, Cryptococcus curvatus studied in our lab has shown fast growth rates and high lipid contents on different substrates, such as glucose, xylose, cellobiose, and glycerol. On crude glycerol from biodiesel derived from yellow grease, we have achieved a 32 g/l of dry biomass density using a fed-batch process. The cellular lipid content is 50%.  The fatty acids produced by this species are similar to those from soybean oils. Currently, we are investigating different reactions to convert microbial oils to hydrocarbons that have the same characteristics as those of gasoline.