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Meat and bone meal (MBM) is a product of the rendering industry, which is looking for high-value applications of rendered animal proteins (RAP). The objective of this research was to utilize MBM as a nitrogen source to produce astaxanthin (AX) by <i>Xanthophyllomyces dendrorhous</i> and quantify the bioavailability of MBM as a potential substitution of commercial nitrogen sources (i.e., yeast extract and peptone). To conduct yeast fermentation under the optimal glucose loading, the C/N ratio was optimized to achieve maximum AX content. MBM was hydrolyzed by using proteinase and alkaline (Ca(OH)₂) for 4, 8, and 16 h with different enzyme and alkaline loadings to produce MBM hydrolysates (MBMHs). The MBMHs were directly fermented by <i>X. dendrorhous</i> under the optimum glucose concentration. Experimentally, the optimum medium contained 40 g/L glucose, 5 g/L peptone, and 3 g/L yeast extract, where AX content of 3.69 mg/g dry cell mass was achieved. MBMHs were used by <i>X. dendrorhous</i> as a nitrogen source, while fermentation with lyophilized MBMHs was generated using proteinase K. This resulted in a maximum AX content of 1.58 mg/g dry cell mass. This research exhibits the feasibility of using MBM as a nitrogen source to produce AX with <i>X. dendrorhous</i>.