Lab-scale batch studies were conducted to determine the biodegradability of oil associated with oily sludge from a steel mill using two microbial cultures enriched in the laboratory. After 60 days of biodegradation the residual oil content in mill sludge was reduced from 4.5-5% to 2.7-3.0%, corresponding to 40-45% loss with respect to initial. The rate of degradation was different for the two enrichment cultures studied. Significant loss of oil was observed in the un-inoculated controls while loss in the azide killed controls was negligible. Bioavailability limitations and the presence of structurally complex high molecular weight hydrocarbons in lubricating oil are responsible for the slow rate of degradation. Significant loss of oil in un-inoculated controls indicated the presence of indigenous microorganisms in oily mill sludge. The association of biomass with sludge solids and presence of a high level of residual oil may adversely affect the recyclability of iron-fines associated with the sludge. (C) 2008 Elsevier Ltd. All rights reserved.