Algal residue after lipid extraction is problematic, yet its high nutrient content makes it a potential source for microbial cultivation. This study proved that algal residue suspension from acid-catalyzed hot-water extraction (AHE) can be used for oleaginous yeast cultivation. When AHE was applied into Nannochloropsis salina, lipid extraction efficiency over 90% was obtained versus the control extraction method using organic solvent, and a water layer containing algal residue nutrients was also produced. Cryptococcus sp. was cultivated in the algal residue suspensions from AHE and a control experiment, and growth was not observed in the control due to the toxicity of alcohol, whereas yeast can grow well in AHE (final cell density: 2.25 +/- 0.4 g/L, lipid content: 23 +/- 2.2%). The AHE method can be a good lipid extraction option for the recycling of algal residue, having the advantage of excluding organic solvents and dissolving residue without any extra processes.