Milled sugar cane bagasse was used as sole carbon source for cultivation of the astaxanthin producing yeast Xanthophyllomyces dendrorhous, formerly Phaffia rhodozyma. In order to assay the efficiency of the bagasse as culture media component, we tested different nitrogen sources, such as potassium nitrate, ammonium sulfate, casaminoacids and peptone, as well as different initial pH values. The only treatment used to prepare the milled bagasse for cultivation of yeast cells, was the submission to 120⁰C by 15 min. during sterilization of media in autoclave. The optimum growth, under the conditions assayed, produced 180 mg of biomass (dry weight) by gram of bagasse in culture medium, 18% of conversion. Astaxanthin, as mensured at 480 nm using an extinction coefficient of 1% =2,150, achieved values close to 1000 mg/g of yeast cells. Since sugar cane bagasse constitutes a waste product of the sugar and fuel ethanol industry, its use as substrate for production of biomass and astaxanthin must minimize the environmental problems related to its disposal.