Approximately 1 million tons of waste cooking oils (WCO) are generated in European Union per year. Oftentimes, these oily wastes are discharged through public sewerage systems, increasing the water treatment costs in wastewater treatment plants. The oleaginous yeast Yarrowia lipolytica W29 is used to simultaneously degrade WCO and to produce lipase (market demand is increasing due to its application in the field of bioenergy). A statistical experimental design based on Taguchi method is employed to assess the effect of initial medium pH, WCO, and arabic gum concentration on lipase production. Initial medium pH is found to be the most significant parameter and the interaction between WCO and arabic gum concentration had the highest influence for lipase production. Additionally, the effect of oxygen mass transfer is studied in batch cultures in a stirred tank bioreactor and the maximum lipase activity (12 000 U · L−1) is obtained at kLa of 16 h−1. Simultaneously with lipase production, also lipid‐rich biomass (48% of lipids mass per dry cellular mass), enriched in unsaturated fatty acids (oleic and linoleic acids) is obtained. Practical Applications: In this work it was demonstrated the possibility of replacing an expensive edible oil (olive oil) by a non‐edible oil waste (WCO) for lipase production. Moreover, no more wastes are produced, since whole cells of Yarrowia lipolytica W29 (lipid‐rich biomass), are a potential source for food supplements. Thus, the bioprocess described fulfill the requisites of circular economy: a low cost substrate is used as raw material, added‐value products (lipase and lipid‐rich biomass) are obtained and no further wastes are generated (take‐make‐dispose concept). Waste cooking oils (WCO) are generated from vegetable oils used at high temperatures in food frying. The biological degradation of WCO by the oleaginous yeast Yarrowia lipolytica W29, with concomitant production of added‐value compounds (lipase and lipid‐rich biomass), allows the reduction of pollutant burden of these oily wastes.