Lignocellulosic biomass shows high potential as a renewable feedstock for use in biodiesel production via microbial fermentation. Yarrowia lipolytica, an emerging oleaginous yeast, has been engineered to efficiently convert xylose, the second most abundant sugar in lignocellulosic biomass, into lipids for lignocellulosic biodiesel production. Yet, the lipid yield from xylose or lignocellulosic biomass remains far lower than that from glucose. Here we developed an efficient xylose‐utilizing Y. lipolytica strain, expressing an isomerase‐based pathway, to achieve high‐yield lipid production from lignocellulosic biomass. The newly developed xylose‐utilizing Y. lipolytica, YSXID, produced 12.01 g/L lipids with a maximum yield of 0.16 g/g, the highest ever reported, from lignocellulosic hydrolysates. Consequently, this study shows the potential of isomerase‐based xylose‐utilizing Y. lipolytica for economical and sustainable production of biodiesel and oleochemicals from lignocellulosic biomass.