The current study aimed to investigate the potentiality of yeast isolate Rhodotorula toruloides Y1124 to be used as a feedstock for biodiesel production, and the reutilization of the de-oiled yeast biomass wastes as a biosorbent for the biosorption of Congo red from aquatic solutions was investigated. From screening results, eight yeast isolates were referred to as oleaginous microorganisms, of which yeast isolate Rhodotorula toruloides Y1124 was the highest lipid-accumulating isolate and was used as a feedstock for biodiesel production. The highest lipid accumulation (64.8%) was significantly dependent on the glucose concentration, pH, and incubation temperature according to Plackett–Burman and central composite design results. Under optimized conditions, the estimated amount of biodiesel synthesis from Rhodotorula toruloides biomass represented 82.12% of total analytes. The most prevalent fatty acid methyl esters were hexadecanoic and 11-octadecenoic, comprising 30.04 and 39.36% of total methyl esters which were compatible with plant oils. The optimum biosorption conditions for Congo red removal were pH 6, a 15 min contact time, and an initial dye concentration of 40 mg L⁻¹. The biosorption isothermal and kinetics fitted well with the Langmuir model and the maximal biosorption capacity (q_max) was 81.697 mg g⁻¹. Therefore, the current study may offer a sustainable feedstock with potential viability for both the synthesis of biodiesel and the removal of organic dyes.