The aim of present investigation was to examine the potential of indigenous bacteria, isolated from textile effluent contaminated soil samples for decolorization of textile dye (Direct blue 53) and textile effluent. Bacterial isolates were evaluated for decolorization in mineral medium amended with Direct blue dye at varying concentration of 10-200 mgL-1. Different incubation parameters such as temperature, pH and aeration were optimized to enhance decolorization rate. The potent bacterial isolates Pseudochrobactrum kiredjianiae YPR 5, Brevundimonas diminuta YPR 25 and Alcaligenes faecalis YPR 36 showed significant decolorization potential after 72 of incubation. Maximum decolourization of Direct blue 53 (200 mgL-1) shown by Alcaligenes faecalis YPR 36 (74.8%) followed by Brevundimonas diminuta YPR 25 (66.9%) at optimum pH (7.0) and temperature (35 °C) under static condition within 72 h of incubation. Pseudochrobactrum kiredjianiae YPR 5 gave dye decolourization (100 mgL-1) of 61.4% at pH (7.0) and temperature (35 °C) under static condition within 72 h of incubation. Alcaligenes faecalis YPR 36 decolourizes (48.5%) textile effluent (25%) after 120 h of incubation. Phytotoxicity studies on seeds of Cicer arietinum, Vigna radiata and Vigna mungo found that treated textile effluent showed less inhibitory effect on seed germination as compare to untreated textile effluent. In conclusion, the results showed that the bacterial isolates have ability to decolourize the textile dye Direct blue 53 dye and textile effluent under the optimized conditions.