The yeast Saccharomyces cerevisiae is a widely used cell factory for the production of fuels and chemicals, in particular ethanol, a biofuel produced in large quantities. With a need for high-energy-density fuels for jets and heavy trucks, there is, however, much interest in the biobased production of hydrocarbons that can be derived from fatty acids. Fatty acids also serve as precursors to a number of oleochemicals and hence provide interesting platform chemicals. Here, we review the recent strategies applied to metabolic engineering of S. cerevisiae for the production of fatty acid-derived biofuels and for improvement of the titre, rate and yield (TRY). This includes, for instance, redirection of the flux towards fatty acids through engineering of the central carbon metabolism, balancing the redox power and varying the chain length of fatty acids by enzyme engineering. We also discuss the challenges that currently hinder further TRY improvements and the potential solutions in order to meet the requirements for commercial application.