Among oil-degrading microorganisms isolated from oil-polluted industrial areas, one yeast strain showed high degradation activity of aliphatic hydrocarbons. From the analyses of 18S rRNA sequences, fatty acid, coenzyme Q system, G+C content of DNA, and biochemical characteristics, the strain was identified as Yarrowia lipolytica 180. Y. lipolytica 180 degraded 94% of aliphatic hydrocarbons in minimal salts medium containing 0.2% (v/v) of Arabian light crude oil within 3 days at 25$^{circ}C$. Optimal growth conditions for temperature, pH, NaCl concentration, and crude oil concentration were 30$^{circ}C$, pH 5-7, 1%, and 2% (v/v), respectively. Y. lipolytica 180 reduced surface tension when cultured on hydrocarbon substrates (1%, v/v), and the measured values of the surface tension were in the range of 51 to 57 dynes/cm. Both the cell free culture broth and cell debris of Y. lipolytica 180 were capable of emulsifying 2% (v/v) crude oil by itself. They were also capable of degrading crude oil (2%). The strain showed a cell surface hydrophobicity higher than 90%, which did not require hydrocarbon substrates for its induction. These results suggest that Y. lipolytica has high oil-degrading activity through its high emulsifying activity and cell hydrophobicity, and further indicate that the cell surface is responsible for the metabolism of aliphatic hydrocarbons.