Engine oil is considered as one of the most important classes of environmental contaminant. Removal of dumped waste engine oil is a challenging task because of its persistent nature in the ecosystem. Biodegradation of used engine oil with microbial consortium offers a very promising approach in terms of cost-effectiveness and elimination of secondary pollutants. This study investigates the efficiency of a formulated bacterial consortium in engine oil biodegradation. Four novel bacterial isolates Enterobacter aerogenes, Raoultella sp, Bacillus megaterium and Bacillus cereus were selected by soil enrichment technique. The newly isolated bacterial strain was identified by 16s rDNA sequencing as Bacillus cereus strain VCRC B540. Individual cultures degrade 5 ml of used engine oil in 15 days. A polyurethane bioreactor adsorbed with the formulated bacterial consortium was very effective in degrading 75 % of used engine oil at a pH 7 within 10 days. Degradation of used engine by the bacterial strains was analyzed by Fourier Transform Infrared Spectroscopy (FT/IR). Based on the available information, this is the first report discussing the engine oil biodegradation potential of a polyurethane bioreactor and the efficiency of the formulated consortium can be used for the better removal of used engine oil from contaminated sites and different effluents.