The cultivation of oleaginous yeast on second-generation feedstocks is an attractive alternative for edible lipid production. Despite many studies in this area addressing single aspects of this bioprocess, one of the major bottlenecks is the integration and optimization of the multiple unit operations while demonstrating this on a larger scale. In this investigation, a microwave-assisted hydrothermal process was developed to solubilize distillers' dried grains with solubles (DDGS). The optimal MW process was run semicontinuously and produced a fermentable oligosaccharide-rich stream with negligible furan-based content. An overliming step and reverse-osmosis stage were demonstrated, increasing the solubilized carbohydrate content to over 60 g/L, suitably concentrated for further bioprocessing. The oleaginous yeast, Metschnikowia pulcherrima, was used to ferment the material and was demonstrated to metabolize up to 75% of the oligosaccharide pool and produced 41% lipid content at a concentration of 14 g/L in a 27 day semicontinuous process.