Abstract: A biosurfactant-producing bacteria strain designated as B1 was separated from oil wastewater and identified as Pseuomonas sp. The oil degrading capacity of strain B1 was studied. The results indicated that the highest degradation rate of oil was 87.25%. Massive peptide-lipid biosurfactant could be produced from oil by strain B1, which made the surface hydrophobicity of bacteria increase and the highest surface hydrophobicity value tested was 0.677. The interfacial tension of pollutants and surfactant molecules could be effectively reduced by Strain B1, and the surface tension of fermentation broth decreased gradually from 65.74 mN/m to 32.19 mN/m. In addition strain B1 presented good emulsification performance with 81.16% of the total volume still emulsified after 18-day operation, which could improve solubility, thus increase contact area between aqueous phase and water-insoluble petroleum hydrocarbons organic phase.