The synthetic dyes are complex and resist microbial degradation, posing serious threat to the environment. The present study investigate methyl red (MR) decolorization and degradation potential of Bacillus circulans NPP1 isolated and identified from textile effluent treatment plant. The Bacillus circulans NPP1 decolorized greater than 98% of 50 ppm MR under optimal conditions (static, 4.5 hr, pH 7.5, 35^oC temperature and 1% inoculum size of OD₆₀₀=0.1). The isolate exhibited efficient decolorization of broad spectrum of dyes (nine dyes other than MR). The combination of glucose and yeast extract (YE) cosubstrates were found to be best for decolorization. The comparative analysis of decolorized broth and control confirmed azoreduction of MR into component metabolites by employing UV/vis spectrometry, FTIR and GCMS techniques. The induction of various oxidative (lignin peroxidases, laccases and tyrosinases) and reductive enzyme (azoreductase) indicated their involvement in decolorization and biodegradation process. The results of phytotoxicity test on seeds of Sorghum bicolor and Pennisteum americanum, revealed less toxic nature of degraded product as compare to parent MR dye. This study emphasizes the potential of Bacillus circulans NPP1 for bioremediation of dye contaminated effluent.