Biodiesel is an eco-friendly, renewable, and potential liquid biofuel mitigating greenhouse gas emissions. Biodiesel has been produced initially from vegetable oils, non-edible oils, and waste oils. However, these feedstocks have several disadvantages such as requirement of land and labor and remain expensive. Similarly, in reference to waste oils, the feedstock content is succinct in supply and unable to meet the demand. Recent studies demonstrated utilization of lignocellulosic substrates for biodiesel production using oleaginous microorganisms. These microbes accumulate higher lipid content under stress conditions, whose lipid composition is similar to vegetable oils. In this paper, feedstocks used for biodiesel production such as vegetable oils, non-edible oils, oleaginous microalgae, fungi, yeast, and bacteria have been illustrated. Thereafter, steps enumerated in biodiesel production from lignocellulosic substrates through pretreatment, saccharification and oleaginous microbe-mediated fermentation, lipid extraction, transesterification, and purification of biodiesel are discussed. Besides, the importance of metabolic engineering in ensuring biofuels and biorefinery and a brief note on integration of liquid biofuels have been included that have significant importance in terms of circular economy aspects.