Ricinoleic acid (RA) is a long-chain hydroxy fatty acid produced from castor bean that is used in the manufacturing of a variety of industrial products. The demand for RA keeps increasing due to its broad applications. However, due to the presence of a potent toxin ricin, the native oilseed plant is not an ideal source for hydroxy fatty acid production. Although there have been significant efforts on engineering different microorganisms for heterologous production of RA, all had very limited success. The main reason for this is the exhibited toxicity of the intracellularly accumulated RA. To avoid this issue, we genetically modified a Starmerella bombicola strain by engineering its native sophorolipid production pathway to direct the synthesized RA bound with sophorolipid to be secreted out of the cell, followed by acid hydrolysis to recover RA. The engineered S. bombicola strain expressing the heterologous codon-optimized oleate hydroxylase-encoding gene from ergot fungus Claviceps purpurea resulted in a record production titer of RA at about 2.96 g/L. Thus, this work highlights a new strategy to produce a high level of hydroxy fatty acids in engineered yeast through a sophorolipid intermediate, enabling a new biocatalysis platform for the future.