The production of microbial lipids through single-cell oil (SCO) technologies has gained increasing attention as a sustainable alternative source of lipids for industrial applications. This development is driven by the limitations of plant-based oils, particularly their competition with food production and demand for arable land. Cutaneotrichosporon oleaginosus has been recognized as one of the most promising oleaginous microorganisms for efficient SCO production. To improve sustainability and economic viability, it is vital to understand the underlying metabolic mechanism of SCO production as well as needs and limitations in bioprocess engineering for the efficient utilization of carbon sources derived from diverse agricultural and industrial side streams. This review focuses on recent studies exploring the potential of SCO production through C. oleaginosus in a bioprocess context through the application of low-cost agro-industrial by-products as alternative carbon sources aiming to supply lipid raw materials for various industrial applications. C. oleaginosus can grow on different agro-industrial waste-derived substrates, including lignocellulosic biomass hydrolysates, biodiesel production process side streams, chitin-based by-products, cheese whey permeates, fungal biomass hydrolysates and algal biomass hydrolysates. These substrates contain various carbon sources, such as glucose, galactose, mannose, xylose, lactose, N-acetyl-glucosamine and glycerol, facilitating efficient SCO production. Additionally, the specific composition of SCO sourced from C. oleaginosus, including the presence of functional compounds like squalene and prevalent long-chain unsaturated fatty acids in its fatty acid profile, make it an ideal option to be used as a raw material in cosmetics, biofuel and food products. This comprehensive overview aims to shed light on the potential of C. oleaginosus in leveraging carbon source alternatives for sustainable SCO production for multifaceted, industrial applications of SCO.