Large amounts of oily sludge are generated as residues by the oil industry, representing a real problem for refineries. This work studied the technical viability of treating oily sludge biologically, through stimulation of native microorganisms, at bench scale. Such microorganisms were able to grow in a medium containing oily sludge as the only carbon and energy sources. Two oily sludge concentrations were studied, 5% (v/v) and 10% (v/v), with a C:N ratio of 100:1. Higher microbial populations were observed in the first case. Substrate inhibition and/or toxic effect took place in the second case. The importance of aeration on the microbial activity and on the biodegradation of the residue was ascertained. In terms of n-paraffins, pristane and phytane consumption, maximum global efficiency of 76.9% (w/w) was achieved, in a medium containing 5% (v/v) of oily sludge. Bacteria of the genus Pseudomonas predominated. Two yeast species were also identified and two filamentous fungi were isolated.