Biodiesel is an alternative fuel to addressing the energy shortage problem. Microbial lipids have attracted widespread attention as one of the potential feed-stocks for cost-effective and efficient biodiesel production. However, the large-scale production of microbial lipids is hampered by the complexity and the high cost of aseptic culturing approach. Metschnikowia pulcherrima is an oleaginous yeast with strong environmental adaptability. It is capable of utilizing a wide spectrum of substrates, and can be cultured under non-sterile conditions. Therefore, this yeast has great potential to replace the traditional oleaginous microorganisms, particularly in the area of recycling wastewater and solid waste for the production of biodiesel. Based on the analysis of lipid production and application conditions of M. pulcherrima, this review summarized the unique advantages of M. pulcherrima and the key factors affecting lipids production. We further discussed the feasibility of cultivating M. pulcherrima on various organic wastes under non-sterile conditions for lipids production. Moreover, we analyzed the challenges associated with M. pulcherrima’s in the yield and mechanism for lipids production, and proposed perspectives for how to achieve efficient biodiesel production using this yeast.