The present study aimed at isolating rhamnolipid biosurfactant-producing bacteria that could utilize paneer whey, an abundant waste source as sole medium for the production purpose. Pseudomonas aeruginosa strain, SR17, was isolated from hydrocarbon-contaminated soil that could efficiently utilize paneer whey for rhamnolipid production and reduce surface tension of the medium from 52 to 26.5 mN/m. The yield of biosurfactant obtained was 2.7 g/l, upgraded to 4.8 g/l when supplemented with 2 % glucose and mineral salts. Biochemical, FTIR, and LC-MS analysis revealed that extracted biosurfactant is a combination of both mono and di-rhamnolipid congeners. The critical micelle concentration (CMC) was measured to be 110 mg/l. Emulsification activity of the biosurfactant against n-hexadecane, olive oil, kerosene, diesel oil, engine oil, and crude oil were found to be 83, 88, 81, 92, 86, and 100 %, respectively. The rhamnolipid was detected to be non-toxic against mouse fibroblastic cell line L292.