Palmitoleic acid (POA; C16:1) is an essential high-value ω-7-conjugated fatty acid with beneficial bioactivities and potential applications in the nutraceutical and pharmaceutical industries. Previously, the oleaginous yeast Scheffersomyces segobiensis DSM27193 has been identified as a promising production host as an alternative for POA extraction from plant or animal sources. Here, the POA-producing capacity of this host was further expanded by optimizing the fermentation process and molecular strain engineering. Specifically, a dual fermentation strategy (O-S dynamic regulation strategy) focused on the substrate and dissolved oxygen concentration was designed to eliminate ethanol and pyruvate accumulation during fermentation. Key genes influencing POA production, such as jen, dgat, ole were identified on the transcriptional level and were subsequently over-expressed. Furthermore, the phosphoketolase (Xpk)/phosphotransacetylase (Pta) pathway was introduced to improve the yield of the precursor acetyl-CoA from glucose. The resulting cell factory SS-12 produced 7.3 g/L of POA, corresponding to an 11-fold increase compared to the wild type, presenting the highest POA titre reported using oleaginous yeast to date. An economic evaluation based on the raw materials, utilities and facility-dependent costs showed that microbial POA production using S. segobiensis can supersede the current extraction method from plant oil and marine fish. This study reports the construction of a promising cell factory and an effective microbial fermentation strategy for commercial POA production.