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Fatty acids (FAs) are promising precursors of advanced biofuels. This study investigated conversion of acetic acid (HAc) to FAs by an engineered Escherichia coli strain. We combined established genetic engineering strategies including overexpression of acs and tesA genes, and knockout of fadE in E. coli BL21, resulting in the production of similar to 1 g/L FAs from acetic acid. The microbial conversion of HAc to FAs was achieved with similar to 20% of the theoretical yield. We cultured the engineered strain with HAc-rich liquid wastes, which yielded similar to 0.43 g/L FAs using waste streams from dilute acid hydrolysis of lignocellulosic biomass and similar to 0.17 g/L FAs using effluent from anaerobic-digested sewage sludge. C-13-isotopic experiments showed that the metabolism in our engineered strain had high carbon fluxes toward FAs synthesis and TCA cycle in a complex HAc medium. This proof-of-concept work demonstrates the possibility for coupling the waste treatment with the biosynthesis of advanced biofuel via genetically engineered microbial species.