Seaweed bioactive extraction generates de-extracted residual solids that remain carbohydrate-rich but are often underutilized. This study developed an integrated valorization route for Gracilaria fisheri spent biomass to produce fermentable sugars for β-carotene production by Rhodotorula paludigena CM33. Reducing sugar production was optimized using response surface methodology (Box–Behnken design) by varying reaction time, sulfuric acid concentration, and biomass loading at 90 °C. The predicted optimum (47.39 min, 2.50% (w/v) H₂SO₄, and 7.13% (w/v) biomass) yielded 22.41 g/L reducing sugars and was validated experimentally at 22.22 ± 0.19 g/L, indicating that the model reliably predicted reducing sugar production. The optimized condition was scaled up in a 22 L bioreactor with sequential acid hydrolysis followed by enzyme-assisted hydrolysis, increasing reducing sugars from ~30 to ~40 g/L. FTIR and SEM analyses indicated progressive modification of the carbohydrate matrix across processing stages. Batch cultivation of R. paludigena on the hydrolysate showed that ammonium sulfate supplementation significantly increased biomass, whereas β-carotene titers were not significantly different. Repeated-batch operation on non-supplemented hydrolysate sustained production over four cycles with β-carotene titers of 13.75–17.27 mg/L, demonstrating the operational feasibility of the hydrolysate-based system. Overall, this work demonstrates a practical seaweed biorefinery approach to upgrade G. fisheri spent biomass into sugars and carotenoid-rich yeast biomass.