The low water solubility of oil sludge and other petroleum hydrocarbon compounds is a major problem for their bioremediation. In this paper biosurfactant enhanced bioaviabability and subsequent degradation of oily sludge was investigated for that purpose, an efficient biosurfactant producing and oil sludge degrading bacterial strain CN3, identified as Ochrobactrum intermedium according to 16S rRNA gene sequencing, was isolated from wood treatment plant soil. The biosurfactant exhibited a high level of thermal stability, tolerance to extreme levels of salinity and a positive effect for increasing pH. The biosurfactant was identified as glycolipopeptidal after Fourier Transform Infrared (FT-IR) spectrometry, Thin Layer Chromatography (TLC), liquid chromatography/tandem mass spectrometry (LC-MS/MS) and biochemical compiosition analysis. The ability of the isolate to degrade petroleum sludge and the effect of its biosurfactant on biodegradation enhancement was tested in liquid culture experiments. The isolate degraded up to 40% of the hydrophobic long chain aliphatic and polycyclic aromatic hydrocarbons in liquid cultures with 4% (v/v) crude oil sludge while the biosurfactant amended microcosm showed up to 70% degradation of the most hydrophobic components of the petroleum sludge in 3 weeks. This suggests the potential application of the isolate and its biosurfactant in bioremediation of contaminated environment and microbial enhanced oil recovery. (C) 2015 Elsevier Ltd. All rights reserved.