Biodiesel production in the U.S. from vegetable oils has increased substantially during the past decade. However, its further increase is limited by the low amounts of oil produced per hectare from temperate oilseed crops. Recently novel transgenic sugarcane has been developed to accumulate both sugars and lipids in stems, making it a promising dual-purpose feedstock to produce both ethanol and biodiesel. In this study, two lines of the transgenic lipid producing sugarcane (lipid-cane) and the non-transformed sugarcane were characterized and processed. The total lipid concentrations were 0.7%, 0.9% and 1.3% for the non-transformed sugarcane and lipid-cane lines19B and 25 C, respectively. Lipid composition analysis showed that about 31–33% of the total lipids were triacylglycerols, main feedstock for biodiesel production, for the lipid-cane samples, while this value was only 5% for the non-transformed sugarcane. By processing the sugarcane stems with a juicer, about 90% of the sugars and 60% of the lipids were extracted with juice. The extracted sugars in juice were fermented to ethanol and the lipids were later recovered from the fermented juice using organic solvents. The recovered lipids from the fermented juice were 0.3, 0.5 and 0.8 g/100 g dry stem for the non-transformed sugarcane and lipid-cane lines 19B and 25 C, respectively. This study proved the concept of the lipid and sugar coproduction from the novel lipid-cane, which have a potential to make a large-scale replacement of fossil derived fuel without unrealistic demands on land area. © 2017 Elsevier Ltd