The last decade has witnessed the tremendous power of systems biology in analyzing and understanding complex biological systems. For example, omics tools have deepened our understanding of microbial metabolism and gene regulation as well as advanced the development of traditional model organisms (e.g., E. coli and yeast) for biofuel production. Despite significant progress in biofuel research, cellulosic or sugar-based processes have been the main focus of such efforts to develop biorefineries. To achieve sustainable and economic biofuel production from lignocellulosic biomass, we must develop technologies that utilize the complete biomass, including lignin, which is currently considered as waste. To this end, our team proposes a hybrid conversion technology, where recalcitrant lignin is depolymerized thermochemically into phenolics, which are fed to a phenolics-utilizing bacterium Rhodococcus opacus PD630 for the microbial conversion of such toxic phenolics to triacylglycerols (TAGs, biodiesel precursors). Our research aims will address which depolymerized lignin compounds are preferably converted to fuel precursors and which compounds are inhibitory and non-adaptable for R. opacus. Ultimately, we will identify optimal depolymerization methods for bioconversion, and test the overarching hypothesis that R. opacus adapts to toxic phenolics by modifying its genome by large-scale gene duplications, resulting in upregulation of phenolic deactivation and catabolism pathways. By using such an approach, we will reach a deeper, systems understanding of R. opacus mechanisms for tolerating and catabolizing biomass-derived compounds, and anticipate uncovering mechanisms both related to, and independent of, TAG production.