A fungus strain producing microbial oils utilizing pretreated rice straw was isolated from soil. This strain was identified as Mortierella elongata PFY based on the morphology and internal transcribed spacer sequence. Using pretreated rice straw as substrate, the average yield of total lipids was 7.07% after 7days fermentation. The GC-MS detection demonstrated that the lipids were composed of saturated fatty acids and polyunsaturated fatty acids. This work presents one new way to make the waste biomass (rice straw) valuable.