Waste streams have emerged as potential feedstocks for biofuel production via microbial bioconversion. Metabolic engineering of the microalga Phaeodactylum tricornutum in its lipid biosynthetic pathways has been conducted with an aim to improve lipid production. However, there has been only limited achievement in satisfying biofuel demands by utilising extracellular organic carbons from low-cost waste streams. Herein, we present a successive staged cultivation mode, based on a previously engineered strain that co-overexpresses two key triacylglycerol biosynthesis genes. We first optimised microalgal biomass and lipid production by using food waste hydrolysate and crude glycerol as the cultivation media. Food waste hydrolysate (5% v/v) is a low-cost organic carbon source for enhanced microalgal biomass production, and the resulting lipid concentration was 1.08-fold higher with food-waste hydrolysate than that of the defined medium. Additionally, the resultant lipid concentration after using crude glycerol (100 mM) was 1.24-fold higher than that using the defined medium. Two carbon feeding modes (hybrid and sequential) were also performed to investigate the potential of engineered P. tricornutum with preliminary mechanistic analyses. The biodiesel properties of lipids produced in the hybrid mode were evaluated for potential application prospects. Collectively, this study demonstrates a waste stream utilisation strategy for efficient and sustainable microalgal biofuel production.