Cane molasses is one of the main by-products of sugar refineries, which is rich in sucrose. In this work, low-cost cane molasses was introduced as an alternative substrate for isomaltulose production. Using the engineered Yarrowia lipolytica, the isomaltulose production reached the highest (102.6 g L −1) at flask level with pretreated cane molasses of 350 g L −1 and corn steep liquor of 1.0 g L −1. During fed-batch fermentation, the maximal isomaltulose concentration (161.2 g L −1) was achieved with 0.96 g g −1 yield within 80 h. Simultaneously, monosaccharides were completely depleted, harvesting the high isomaltulose purity (97.4%) and high lipid level (12.2 g L −1). Additionally, the lipids comprised of 94.29% C 16 and C 18 fatty acids, were proved suitable for biodiesel production. Therefore, the bioprocess employed using cane molasses in this study was low-cost and eco-friendly for high-purity isomaltulose production, coupling with valuable lipids.