Volatile fatty acids (VFAs) derived from organic wastes are being considered as low-cost feedstock for microbial lipid production as a valuable alternative to plant derived oils/biodiesel. In this study, VFAs were produced from anaerobic open culture fermentation of wastepaper and subsequently, used as a feedstock for lipid production by Cryptococcus curvatus. Total VFAs, yield and productivity achieved from waste office paper (WOP) and waste newspaper (WNP) were 17.3 and 10.2 g/L, 0.17 and 0.10 g/g TS, and 0.86 and 0.51 g/L/day, respectively. Biomass, lipid content and productivity achieved utilizing VFAs derived from WOP and WNP were 4.3 and 2.9 g/L, 41.2 and 27.7% DCW, and 0.037 and 0.033 g/L/h, respectively. The dominance of fatty acids such as oleic, palmitic, stearic and linoleic acid in the lipids suggests a high level of similarity with plant/vegetable oils used for biodiesel production. Therefore, VFAs derived from wastepaper could be potentially used as feedstock to produce microbial lipids towards cost-effective production of biodiesel.