Progress in economy leads to increases in society’s energy requirement. Fossil fuel is the major source of fulfilling energy requirements. Biodiesel is an alternative for liquid fossil fuel. In this study, biodiesel was produced from lipid obtained from vegetable waste using oleaginous yeast. The pretreated waste hydrolysate was used for the growth of oleaginous yeast, Lipomyces starkeyi which was able to yield a biomass concentration of 20 g/L. Obtained biomass was transesterified directly in the presence of Nanocatalysts calcium hydroxide and Aluminum oxide. The transesterification process was optimized by RSM software. The optimum ratio of Methanol to lipid was obtained as 6:1and catalyst concentration of 0.5%. Optimum temperature for biodiesel production was obtained as 60ºC. Maximum amount of biodiesel obtained as 8g/L which is worked out to be 40 % of the biomass used in this process. The oxidative stability of the obtained biodiesel was found out to be 1.84 years using biodiesel rancimat. Hence optimisation of process has yielded highly stable oil from microbial biomass grown from waste organic solids. The results of this study concluded that biodiesel can be obtained from biomass containing lipid by direct transesterification.