Alternative fuels are necessary to meet the increasing demands for fuels. Alternative fuels such as biodiesel are produced using vegetable oils, which are prominentt in the food industry. An alternate feedstock could be oil-producing microorganisms. These oleaginous microorganisms are defined as accumulating more than 20% of their weight in oil as lipids. Cultivating these microorganisms for oil production is not economical due to the high production costs from the sugars in the culture medium. Municipal wastewater could be a potential growth medium that has not previously been considered for cultivating oleaginous microorganisms. However, municipal wastewater contains a low concentration of carbon, which does not promote oil accumulation in the oleaginous microorganisms. To increase the carbon concentration in the wastewater, lignocellulosic sugars could be added to the municipal wastewater. These sugars are a potential alternative to sugars that are in the food industry. The goal of this research is to determine the efficacy of using municipal wastewater to cultivate a consortium of oleaginous microorganisms, thus, producing oil for biodiesel production. First, a consortium of oleaginous microorganisms was cultivated on autoclaved wastewater to determine if the wastewater contains any inhibiting substances for the microorganisms. In addition to the substances in the wastewater, indigenous microorganisms are possible inhibitors to the consortium. Therefore, to determine the effect these indigenous microorganisms have on the oleaginous microorganisms, the consortium was cultivated on raw municipal wastewater amended with varying amounts of sugar. Since the municipal wastewater can be used as a cultivation medium, the effect of the addition of lignocellulosic sugars was determined. During the production of lignocellulosic sugars, furfural and acetic acid, known microbial inhibitors, are formed. The effect of these inhibitors on the consortium’s growth and oil accumulation ability was ascertained, and inhibition models were developed to describe their impact. With these results, SuperPro Designer v6.0 was used to perform simulations and economic analyses to determine the efficacy of incorporating an oleaginous microorganism consortium in a wastewater treatment facility.