Microbial oil accumulated by fungal cells is a potential feedstock for biodiesel production, and lignocellulosic materials can serve as the carbon source to support the fungal growth. The dilute acid pretreatment of corn stover can effectively break down its lignin structure, and this process generates a hydrolysate containing mostly xylose at very dilute concentration and numerous by-products that may significantly inhibit the cell growth. This study utilized corn stover hydrolysate as the culture media for the growth of Mucor circinelloides. The results showed that Mucor cells formed pellets during the cell growth, which facilitates the cell harvest from dilute solution. The results also showed that the inhibitory effect of furfural, 5-hydroxymethylfurfural (HMF), and acetic acid could be avoided if their concentration was low. In fact, all these by-products may be assimilated as carbon sources for the fungal growth. The results proved the feasibility to reuse the cultural broth water for acid pretreatment and then use for subsequent cell cultivation. The results will have a direct impact on the overall water usage of the process.